KARACHI, Oct 25: Cotton market on Friday maintained firm outlook as rumours of a short crop owing to pest attack worried spinners amid fears of further increase in prices.
However, unlike the previous sessions most of them did not resort to panic buying and tried to verify from different sources about the latest crop position in the southern Punjab cotton belt.
“But panic has already gripped the spinning sector and leading spinners are weighing a number of options to remain competitive on the world textile markets in the backdrop of local price flare-up”, brokers said.
Although the import and export of lint cotton is free, the current rise in New York cotton futures to about 45 cents per lb has made imports expensive.
Last year, spinners have imported about 1.3m bales from various sources to meet a possible shortfall in the local production as feared during the mid-season.
Floor brokers said after having made hectic buying during the last couple of sessions, lifting on average about 40,000 bales daily, spinners have curtailed their buying at the rising prices.
On Friday most of the deals in the Punjab variety were done at Rs2,200 per maund, while Sindh spinners held on to their positions and did not lower their asking prices.
Cotton analysts said the crop position will be clear after the Pakistan Cotton Ginners Association (PCGA), releases arrival figures of phutti for the fortnight ending Oct 31.
The mid-season figures could work on both sides of the market, which will be reflected in the ruling prices of both lint and phutti, they added.
Reports coming in from the cotton belt reflects that phutti prices have soared to Rs1,000 per 40 kg as growers are not inclined to sell below this rate. There are reports of holding back of stocks also.
On the corporate front, private sector exporters registered export contracts for 535 bales sold to Bangladesh and Indonesia, with the Export Promotion Bureau on Oct 19 and 24.
Official spot rates were further upped by Rs50 to Rs2,100 per maund but in physical trading most of the deals were done at Rs2,200.
New York cotton futures also maintained their upward drive and were marked further higher by 0.68 and 0.62 cents per lb at 45.89 and 45.17 cents for both the ruling October and the distant March settlements respectively.
Ready business was light as spinners were not inclined to chase prices further higher and totalled 5,000 bales, all from the Punjab ginneries as under: 2,000 bales, Rahimyar Khan at Rs2,200, 1,000 bales, Sadiqabad at Rs2,200, 400 bales, Garah More, 400 bales, Jehania, 200 bales, Vehari and 200 bales, D.G.Khan all at Rs2,200.