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Bears continue to haunt cotton market
KARACHI, April 5: The cotton market passed another
unexciting session on Saturday as the prevalent
bearish spell in cotton yarn off-take worldwide
continued to haunt both the spinners and ginners.
Spinners worried over declining trend in yarn
prices kept to the sidelines, as they, in fact,
are relying on 0.6-0.8 million imported bales to
meet one-month mill use.
The yarn market witnessed a wilting trend
world-over, due to high inventory volumes; the
domestic market being no exception.
"We see for the first time in the country’s
history that yarn prices directly influence raw
cotton market," one dealer said.
Pakistan exported a record quantum of cotton yarn
in January this year - the highest both in terms
of quantum and proceeds in the country’s history.
But soon, the trend changed globally and yarn
exports started declining, forcing spinners to
stay out of the rings.
Export Promotion Bureau (EPB) had fixed official
average price of yarn at $2.12 per kilogram, which
it has now reduced to $1.99 per kg. On the ready
board, no deal was reported as ginners and dealers
sat crossed fingers through out the day. Some 400
bales were dealt in forward contract, with
physical delivery next month.
Market player anxiously awaited official figures
of seed cotton arrivals into ginning factories, to
be published by Pakistan Cotton Ginners
Association (PCGA).
Leading cotton brokers said that
more-than-anticipated seed cotton arrivals and
subsequent output of lint cotton might add more
woes to the depressed domestic market.
This time around, the officially appointed cotton
crop assessors were proven right in their forecast
of having a production of around 10 million bales
or more during market year 2003-04.
Ginners including the PCGA’s current chairman had
claimed on record of having an outturn of not more
than 9.6 million bales. But time proved them
wrong.
Ginners argued that the output exceeded their
estimates only in terms of number of bales while
on standard weight size the crop comes to 9.2
million bales.
The News International, Pakistan |
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Pakissan.com; Advisory Point
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