KARACHI, March 6: Trading activity on the cotton market on Thursday fell to a modest proportions as ginners held on to their positions and did not lower the asking prices below Rs2,600 per maund.
However, some of the ginners tried to clear the backlog of their inferior stocks at the higher levels, which some of the spinners lifted willingly for blending purposes.
The leading ginners are holding on to their positions as far as the fine and contamination-free lots are concerned amid the market talk of an imminent fresh flare-up, brokers said.
“The price-war between the ginner and the spinner is on,” they said, adding “indications are that the latter may remain at the receiving end owing to lower crop estimate and their short positions as far as the annual consumption needs are concerned.”
Although prices of cotton yarn have also risen in sympathy with the lint, spinners claim the increase did not cover the entire overheads. The situation on the export front is also not that happy as foreign buyers of textiles are not inclined to pay more at least for the near-term.
“The cotton trade is certainly heading for a big jolt in the coming weeks,” one spinner predicts, adding “whether the leading ginners are holding back long unsold positions or the crop is really short of the target will set the price direction.”
But one thing appears certain both the textile ancillary industry and spinners remain at a disadvantage until the supply position of lint shows a considerable improvement, he adds.
The ginners are now in a commanding position and vow to cover last two years losses after making selective selling and holding on to their unsold stocks.
Reports about the price situation from the world markets also bullish and make import more expensive at least for the near-term. New York cotton futures on Wednesday were quoted higher by 0.35 cents per lb at 49.00 and 57.99 cents per lb for both the matured March contract and the ruling May delivery, respectively.
The local official rate committee also raised its price to Rs2,500 per maund, excluding the 15 per cent sales tax.
Ready business was light as till late in the evening about 2,000 bales of inferior varieties changed hands, the following being some of the notable deals:
SINDH VARIETY: 500 bales from Sanghar at Rs2,400 and 600 bales of Akari at Rs2,475.
PUNJAB TYPE: 500 bales from Mian Channu at Rs2,265 and Garahmore at Rs2,500.