KARACHI, Jan 22: Cotton market on Wednesday showed bullish trend as ginners further raised their asking prices amid reports of pressure on ready supplies in the backdrop of falling phutti arrivals into the ginneries.
Official spot rates were revised upward to Rs2,200 per maund but in the ready section ginners were not inclined to sell below Rs2,300 irrespective of the quality factors, dealers said.
The sudden increase in prices and ginners reluctance to part with the stocks at the current levels reflects that they have a fair idea of the crop situation and expected pressure on the ready supplies in the weeks to come and have no option but to toe the line of ginners, they said.
“Spinners are sandwiched between reports of a short crop and higher ruling prices and could not precisely decided whether or not buy at the higher levels”, one broker said.
A considerable decline in the ready business during the last two sessions shows that the ginners have a full control on the price situation and have pushed spinners at the receiving end at least for the near-term, they added.
Most of the leading spinners are said to be willing to buy fine lots at Rs2,300 but ginners have further raised their asking prices, which spinners claim are well above their export parity level.
Leading spinners are now eyeing the falling prices of lint and may opt for imports if local prices are raised further higher. New York cotton futures on Tuesday were quoted further lower by 0.67 and 0.50 cents for both the ruling March and the distant May settlements at 49.96 and 53.80 cents per lb respectively.
“If the ruling March contract fall further by a couple of cents more, we will explore the possibility of imports from the foreign markets”, says a leading spinner “but until then we may curtail our daily intake”.
Floor brokers said sharp decline in arrivals of phutti for the fortnight ended Jan 15, have created doubts in the minds of spinners about the supply position and the consequent rise in prices.
“The crop situation may remain uncertain until the next fortnight’s figures of phutti arrivals and in between there may a lot of speculative activity and price flare-up,” they added.
Ready offtake was light owing to higher asking prices, the following being some of the notable deals: 1,000 bales, each Jalalpur and Rajanpur at Rs2,300, 500 bales, D.G.Khan at Rs2,200 and 200 bales, Mungi Banglow at Rs2,190.