KARACHI, Feb 26: Cotton prices on Wednesday rose further as spinners and mills lifted all the lots offered by the ginners at an average rate of Rs2,500 per maund excluding 15 per cent sales tax.
Another 20,000 bales changed hands around this level as spinners were out to grab the floating stock of the fine lots to cover their forward positions against foreign sales of cotton yarn, dealers said.
Big lot-business was also witnessed as financially strong spinners having their hands full for the quarter ending March 31, were not inclined to sit on the sidelines at least for the near-term.
“We will continue to our buying operations below the next barrier of Rs2,600 per maund,” some leading spinners say “we think twice before buying above this level, well beyond our export parity rates.”
After having suffered losses for the last two seasons, both the growers and the ginners are the chief beneficiaries of the current price flare-up, they said “we are at the receiving end since early January owing to conflicting reports about the size of the crop and the consequent sharp increase in prices.”
However, daily large volumes reflect a near-panic conditions on the cotton market, although price increases are orderly ranging between Rs10 to Rs25 each session.
The reports of falling unsold stocks with the ginners have further accentuated the supply situation, allowing spinners a little breathing space to plan for the long-term.
“With import of lint virtually uncompetitive at the prevailing world rates, spinners have to rely on the local supplies irrespective of the price flare-up,” brokers said.
Official spot rates were further upped by Rs25 per maund in the ready section, bulk of the business was done above them.
New York cotton futures, which had received massive battering a day earlier owing to rolling over of forward positions from the matured March contract to the ruling May settlement, staged a smart recovery, up 0.90 and 1.06 cents per lb at 48.60 and 57.68 cents per lb.
Ready offtake was active as till late in the evening about 20,000 bales changed hands as under:
SINDH VARIETY: 1,000 bales, upper Sindh at Rs2.525, 500 bales, Khairpur at 2,480, 500 bales, Kumbh at 2,480 and 500 bales, Rasulabad also at 2,480.
PUNJAB TYPE: 2,500 bales, Rahimyar Khan at Rs2,525, 600 bales, Vehari at 2,525, 2,000 bales, Mailsi at 2,525, 3,000 bales, Haroonabad at 2,490 to 2,500, 500 bales, Chishtian at 2,475 and 500 bales, Burewala at 2,500.