KARACHI, Jan 16: Cotton market on Thursday gave another firm performance as both spinners and exporters remained active buyers at the current levels amid an actively traded session.
The strong presence of the private sector exporters in the market worried spinners as the entry of the former as second buyer in place of Trading Corporation of Pakistan (TCP) could well mean higher prices in the coming sessions, dealers said.
The fact that some of the exporters are buyers at around Rs2,175 per maund have sent shock waves among the spinners and mills, who as the first buyers, were holding the price line below this level, they said.
Indications are that prices are heading to stay above the Rs2,200 level if the exporters stayed in the market for another week or so. According to market sources most of the leading exporters had made forward sales of a substantial quantity of lint to foreign buyers of Bangladesh and some Far Eastern importers and are in the market in a big way to cover their forward positions.
However, much of the future price outlook will depend on the latest arrival figures of phutti for the fortnight ended Jan 15 as it will give a fair idea of the crop.
For the last couple of sessions, spinners are also actively participating in the daily business as conflicting reports about the size of the crop did not allow them to sit on the sidelines. However, reports that some of the spinners are selling their surplus stocks to the exporters indicate that all is not well with the yarn exports, which are not getting competitive value of the product on the world markets.
Official spot rates remained pegged at the previous level, although in the ready section a big deal was done at Rs2,225 per maund.
New York cotton futures showed firm trend and rose by 0.16 and 0.2 cents per lb for both the ruling March and the distant May settlements at 51.46 and 56.16 cents per lb, respectively.
Ready offtake shrank to about 5,000 bales owing to higher asking prices, the following being some of the notable deals: 2,000 bales from Bahawalpur done at Rs2,225 and 600 bales of Kot Lalu at Rs2,125.
Meanwhile, reports coming from the southern Punjab cotton belt indicate picking operations of phutti are almost complete and growers are sending their last consignments to the ginneries. Price of phutti on an average have fallen to below Rs900 per 40 kg, but fine variety continue to fetch competitive rates, dealers said.