KARACHI, April 25: Physical activity on the cotton market again slowed down on Friday as both spinners and leading mills remained conspicuous by their absence owing perhaps to higher asking prices by the ginners.
It was speculated that the Thursday’s revival of mill demand could be a prelude to brisk activity in the coming sessions as leading groups among them will try to grab the falling floating stock, floor brokers said but their snap withdrawal surprised everyone.
“It is pretty clear now that ginners are least worried over the absence of spinners and mills from the market”, they said adding “they know an unsold stock of about 0.250m bales does not pose any threat to them even prices fall from the current levels”.
According to their future perceptions, spinners have to be back in the market sooner or latter as their annual consumption requirements could not be met through costly imported stuff, they have to be back to lift the local unsold stock at the sellers option at the fag-end of the current season or well before the new crop arrives on the market.
Spinners don’t deny the fact that they have curtailed their daily covering purchases from the market but say the falling world cotton yarn prices is the main cause behind their volatile presence in the daily activity.
“The post-Iraq war foreign yarn markets are still to recover from the sluggishness and until that happens our presence on the market may remain below average”, they said.
Market sources said ginners are holding on to their positions of fine lots and are unloading unsold stocks of inferior types between Rs2,400 on the lower side and Rs2,500 on the higher but are not inclined to sell fine lots below Rs2,600 per maund.
According to official figures, spinners have imported 0.473m bales during Sept 1, 2002 to April 19, 2003 from various countries and market sources said another 0.3m bales already contracted on forward basis are due during the next couple of weeks.
On the export front, private sector exporters sold 1,525 bales to importers from Bangladesh, Indonesia and Taiwan, the total foreign sales so far being 0.179m bales including 54,148 bales being of old crop.
Official spot rates firmly held at the overnight levels for the third session in a row but New York cotton futures received heavy battering on speculative trade selling.
While the ruling May settlement fell by 1.80 cents at 56.40, the forward July contract suffered a decline of 1.63 cents per lb at 57.86 cents per lb.
Ready offtake was light as till late in the evening about 1,000 bales of inferior types from the central Sindh cotton belt changed hands.