KARACHI, April 10: Cheerless conditions were again witnessed on the cotton market on Thursday as spinners made selective covering purchases apparently awaiting the post-Iraq war export prospects for the textile products.
There was no tangible change in the prevailing price outlook as spinners seem to have absorbed the negative impact of a short crop after keeping to the sidelines rather than resorting to panic buying.
The notable feature was that a forward deal of 700 bales from a central Punjab ginnery was finalized at Rs2,800 on 100-day credit which reflects higher price outlook, brokers said.
But on the other hand ginners despite holding modest unsold stocks of about 0.4m bales appeared to be in a bit hurry to sell them even at the falling prices.
For the last couple of days most of the deals in the ready section are done well below Rs2,600, although ginners were eyeing the figure of Rs2,700 per maund in the backdrop of a short crop.
“After staying on the sidelines for a session or two, spinners appear on the scene and disappear after buying a couple of lots”, brokers said “their strategy is to keep price around the current level and if possible to push them further lower”.
They said it was perhaps for the first time in the history of cotton trading that spinners managed to keep prices on the lower side despite a terribly short crop.
“Spinners are said to be on a big shopping list on the foreign market to purchase at least half a million bales more for the nearby shipments”, market sources said “together with the consignments already in the pipelines the total imported stuff is expected to touch a million bales mark”.
They said the prevailing world prices around 58 cents per lb are on the higher side of the spinners’ export parity level and they are hoping a modest decline in the ruling rates during the next couple of weeks.
Official spot rates remained pegged at the last close, while New York cotton futures showed fresh fractional decline of 0.10 and 0.9 cents at 56.87 and 58.47 cents per lb for both the ruling May and the distant July settlements.
Ready offtake was modest totalling about 4,000 bales including some odd lots, reflecting that some of the ginners are out to clear their unsold positions. The following are the details of deals: 365 bales, Bhiria at Rs2,455, 200 bales, Setharja at Rs2,550, 100 bales, Vehari at Rs2,550, 600 bales, Samundri at Rs2,625 and 700 bales, at Rs2,800 on 100-day credit and 1,000 bales, NIAB Bhan Saeedabad at Rs2,400.