KARACHI, Dec 27: A tug of war was witnessed on Friday between millers and ginners over raw cotton prices with both the sides trying to tilt the situation in their favour on reports of lowered production estimates of cotton made by the Cotton Crop Assessment Committee (CCAC).
Based on lower sowing area by 12.7 per cent the CCAC has fixed its latest production estimate at 10.1 million bales (ex-farm) for the crop season 2002-03, which would mean 9.6 million bales ex-gin production.
As the millers are not willing to pay more than Rs2,150 per maund to keep their yarn prices competitive, the ginners on the other hand feel that rising phutti prices fully justify their higher price demand for cotton.
A leading cotton analyst Naseem Usman said that presently there is a lot of demand from millers for quality cotton but the ginners are reluctant to dispose of their stocks at this juncture.
The ginners are anticipating flare-up in raw cotton prices particularly when the world cotton scenario is also not too encouraging.
The latest estimates for the world cotton production has been placed lower by 10.5 per cent vis-a-vis two per cent improvement in the global consumption.
The lower world production was attributable to an anticipated 9 per cent decline in the world planted area and yield reduction to 629 kg per hectare from 653 kg per hectare of last year.
The world cotton prices were also much improved as against the depressed and historically low prices witnessed in 2001-02 season.
Consequently, the local cotton market remained firm amid higher demand from millers and poor response from ginners. The phutti prices also rose between Rs20 to Rs25 in Punjab to Rs900 per 40-kg.
Around 12,000 bales changed hands on ready board and were mostly transacted below Rs2,150 mark. The KCA’s spot rates were unchanged.
According to details given by floor brokers 500 bales from station Tandyari were sold at Rs2,080, 2,700 bales from Shahdadpur at Rs1,950, 1,000 bales from Bandi at Rs2,075, 1,000 bales from Kot D G at Rs2,075, 1,000 bales from Moro at Rs2,075, 500 bales from Sindri at Rs2,085, 200 bales from Sanghar at Rs2,010 (seed), 3,400 bales from Rahimyar Khan at Rs2,150 and 1,600 bales from Khairpur at Rs2,150.