KARACHI, Dec 17: Cotton market on Tuesday burst into activity as both spinners and mills made hectic covering purchases at the prevailing levels against their forward sales of cotton yarn.
“It was a day for big-lot business as leading spinners virtually flooded market for no apparent bullish reason”, one broker said adding “it may be beginning of fresh quality war among the big ones whose hands are full of export orders”.
For the second time during the current season 50,000 bales changed hands in a single session, reflecting that the prevailing prices suit to both the contenders, he adds.
Most of the deals were finalized depending on quality between Rs2,100 to Rs2,150 but the higher limit of Rs2,200 per maund is yet to be touched.
Floor brokers said the current buying flurry is aimed at grabbing the floating stock of the quality lint, notably from the southern Punjab cotton belt.
They said the prevailing prices are attractive enough as far as export parity levels of spinners are concerned and no one among them is inclined to stay away.
Some brokers also said spinners fears that quality of lint ginned from the third picking of phutti may be inferior as compared to the second picking and that is perhaps why no one among them to stay on the sidelines.
Liquidity problems are there as slow foreign offtake of cotton yarn against previous deals has created financial problems for most of the spinners barring some big cartels.
In the absence of Trading Corporation of Pakistan from the market ginners are also not inclined to hold long positions and continued to sell their stocks at the spot rates.
Meanwhile, some of the leading private sector exporters have also entered the market and are covering positions against their forward sales of lint, dealers said.
Ready business was fairly brisk and amounted to about 50,000 bales as under:
PUNJAB VARIETY: 12,000 bales, Bahawalpur at Rs2,100 to 2,150, 4,000 bales, Ahmedpur East at Rs2,115 to 2,150, 2,000 bales, D.G.Khan at Rs2,125, 4,000 bales, Sadiqabad at Rs2,150, 3,000 bales, Rahimyar Khan at Rs2,150, 5,000 bales, Kabirwala at Rs2,150, 2,000 bales, Burewala at Rs1,925 to 2,050, 1,000 bales, Chichawatni at Rs1,925 to 2,050 and 1,000 bales, Mian Channu at Rs2,000.
SINDH TYPE: 1,000 bales, Khairpur at Rs2,115 and 2,000 bales, some other upper Sindh stations at Rs2,150.