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Dullness prevails on cotton market
KARACHI, April 30:
Cotton market on Thursday lacked normal trading
interest as spinners withdrew to the sidelines
anticipating decline in prices after
more-than-limit fall in New York cotton futures on
panic speculative unloadings.
The sell-off was triggered followed by reports
that China may not need more lint to meet its
consumption needs. It has been on a big shopping
list and had already purchased half a million
bales from the US exporters.
But on the other hand ginners are steadily holding
on to their unsold positions and appear to be a
little worried over the prevailing panic on the
world markets.
Some leading ginners say they will not be
influenced by the negative fallout of the current
steep decline in world lint prices and await
further developments. "New York cotton futures
generally behave erratically for some internal
reasons and their price trend could not relied for
a longer period being speculative in nature,
although some vested interests try to spread scare
among the ginners".
"Local prices may be generally guided by the
supply and demand factors and there is no cause of
worry for any of us", claims a leading ginner "it
may not be that difficult to sell about a million
bales before the arrival of the new crop".
An air of optimism, however, prevailed among the
spinners as the fall of the July contract below
the 60 cents per lb mark has made imports of lint
more competitive if the current panic-selling was
sustained.
New York cotton futures on Wednesday received
massive battering on panic-selling, off more than
limit-decline of 4.85 and 3.00 cents per lb at
60.00 and 59.63 cents per lb for both the ruling
May and distant July settlements.
"There could be a turmoil on the world cotton
market if the New York futures remain under
speculative squeeze", says a leading analyst
adding "some of the leading spinners and mills
still need some more supplies have already ordered
their international agents to make forward deals
around the current levels".
It is, however, not clear how the local market
will react after the trading resumes next week as
by that time final arrival figures of phutti may
also be available.
Physical activity on the local market, therefore,
remained insipid as both the sellers and the
buyers kept to the sidelines without any bidding.
Official spot rates, however, did not show any
change and were firmly held at the overnight level
of Rs2,875 per maund.
Ready off take was at a low ebb as spinners kept
to the sidelines anticipating decline in prices.
Some of the deals in Sindh type were reported late
on Wednesday evening as under: 200 bales, Moro at
Rs2,840 and 200 bales, Kot Diji at Rs2,860.
The following are Thursday's new crop Karachi
Cotton Association (KCA) official spot rates for
local dealings in Pak rupees for base grade 3
staple length 1-1/32" micronair value between 3.8
to 4.9 NCL.
Rate
for Exgin
price Ex-gin price
including
Sales Tax
Upcountry
Expenses Spot rate ex-Karachi
including Sales
Tax @ 15%
37.32 kgs 2,875 3,306.25 50 3,356.25
Equivalent
40 kgs 3,081 3,543.15 50 3,593.15.
The DAWN
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Pakissan.com; Advisory Point
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