KARACHI, Oct 19: Report of fall in arrivals of phutti into the ginneries during the last fortnight worried spinners and they resorted to panic buying on Saturday without awaiting further developments on the farm front.
An idea of panic mill buying may be come from the fact that about 15,000 bales, including some big lots, changed hands mostly at Rs2,025 for the Punjab lint.
The official arrival figures released by the Pakistan Cotton Ginners Association (PCGA) for the fortnight ended Oct 15, showed a decline of 2.41 per cent as compared to the last season’s figures, which many spinners fear could lead to a short crop.
But market sources said despite reports of pest attack in some of the major areas in the southern Punjab cotton belt, it is too early to form an opinion about the total size of the crop.
“Owing to election activities, picking operations remained virtually suspended for a couple of days preceding the Oct 10 deadline, which may have caused fall in arrival of phutti,” they added.
However, the general perception is that the fall in overall figures does not reflects the correct position of the crop at this initial stage as the first picking in some of the southern Punjab cotton belt is yet to start.
“Spinners must not opt from panic buying for fears of a short crop to keep lint prices competitive in a bid to remain competitive on the world textile markets,” some analysts said.
The interesting feature is that the Punjab variety, which was being sold at discount as compared to its Sindh counterpart because of low micronaire earlier this month, is being sold at premium, brokers said.
This reflects that quality of the Punjab lint, notably in the southern belt has improved a bit with the passage of time. Fine lots are being sold at around Rs2,025 per maund, which spinners claim is higher than their yarn export parity levels, they added.
On the export front, a private sector exporters registered export sales contracts for 396 bales, sold to Sri Lanka on Oct 17, with the Export Promotion Bureau. Total foreign sales during the new cotton season, since Sept 1, 2002, rose to 0.319m bales.
Official spot rates consolidated the previous gains, although some of the deals in the ready section were done well above them depending on quality.
New York cotton futures on the other hand maintained their upward drive on reports of higher US exports. Both the ruling December and the forward March settlements finished further higher by 0.41 and 0.42 cents at 44.45 and 46.72 cents per lb, respectively.
Ready offtake was brisk as till late in the evening about 15,000 bales, changed hands as under:
SINDH VARIETY: 200 bales from Shahdadpur at Rs1,975; 200 bales, Nayabad at Rs1,940; 300 bales, Sanghar at Rs1,990; 200 bales, Moro at Rs2,000; 200 bales, Bhiria Road at Rs2,000; and 2,000 bales of Kot Diji at Rs2,025.
PUNJAB TYPE: 600 bales of Muridwala at Rs2,000; 400 bales, Chichawatni at Rs2,000; 400 bales, Jalalpur at Rs2,025; 4,000 bales, Lodharan at Rs2,025; 2,00 bales, Jehania at Rs2,025; 3,000 bales from other stations also at Rs2,025; and 400 bales of Sadiqabad at Rs2,025.