KARACHI, Feb 19: The price flare-up triggered by fears of a short crop continued for the fourth session on the cotton market on Wednesday as ginners remained in a firm control of the market.
After having purchased about 30,000 bales a day earlier, spinners and mills also took a technical breather in a bid to unnerve ginners but they held on to their positions and did not lower their asking prices.
Some of the spinners having sound financial positions and firm export orders for the next quarter ending June 30, continued to indulge in big-lot business amounting to 5,000 bales around Rs2,400 per maund or slightly above this level, brokers said.
But some of the spinners and mills holding terribly short positions did not follow the line of those who hold large stocks and lifted most of the lots offered by the ginners in line with their export parity levels.
However, spinners have a fair idea about the future price outlook and would force some of the ginners to indulge in forward selling on credit basis, dealers said.
A deal of 1,000 bales from the upper Sindh ginneries changed hands at Rs2,475 per maund on one-month credit which reflects the future price outlook and spinner perceptions about the ready supplies, they added.
No one could deny the fact that cotton situation is getting out of the control of the spinners and mills as a considerable decline in arrivals has put ginners in commanding position, brokers said.
There is a near-panic among the spinners about the future supplies and how to arrange them at a competitive price is their chief worry now in the backdrop of dwindling prospects of imports because of higher world prices.
“The lint prices are close to hit decade old highest level of Rs3,000 per 40 kg during the next couple of sessions as fears of a short supply will continue to inspire speculative buying from mills and spinners”, brokers said.
On the export front, the private sector exporters sold another 5,583 bales to the importers from Bangladesh and Thailand, pushing the total of foreign sales to 0.124m bales.
Official spot rates were adjusted upward by another Rs25 per maund to Rs2,335, although in the ready section most of the deals were done well above them.
Ready offtake was relatively slow totalling about 8,000 bales as under: 200 bales, Moro at Rs2,350, 200 bales, Bhiria Road at Rs2,400 and 500 bales at Rs2,390 to Rs2,400, 3,000 bales, upper Sindh at Rs2,400, 1,000 bales on credit at Rs2,475 and 2,000 bales, Bahawalpur at Rs2,450.