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Price war continues on cotton market
KARACHI, April 9: Dull conditions were again
witnessed on the cotton market on Friday as both
ginners and spinners remained locked in a price
war but it appears to be a no-win situation for
the both.
For the second session in a row the ready board on
the Karachi Cotton Association (KCA) remained
blank as there were no details of any official
deal.
While ginners were not inclined to lower their
asking prices for the fine lots below Rs3,000 per
maund, spinners appears to be willing buyers of
low-mic lots available below Rs2,800 per maund,
which they need for blending purposes to produce
blended cloth for the export market.
But some leading brokers claim, spinners and mills
are not sitting idle and making direct purchases
from the ginners at rates which suit to both and
according to their parity levels.
According to market sources mills have
significantly increased the ratio of polyester
fibre after mixing it with low-mic lint and are
producing blended cloth for the foreign markets as
it lower the cost of the final product.
"The ratio of polyester fibre into cotton has
increased from the previous average of 25 to 30
per cent to 40 per cent as most of the mills are
maintaining the 60:40 ratio in line with the
foreign demand", they said. As a result, demand
for lint has decreased during the last couple of
weeks, which in turn has a negative impact on the
daily ready business, they said.
Meanwhile, reports coming from the polyester
sector indicate that after a recent rise, prices
are now stable despite steady covering purchases
being made by the spinners. Reports from the New
York Cotton Exchange are not that disturbing as
they have been a couple of weeks earlier as
futures are stable around the previous levels.
The ruling May contract was fractionally marked up
by 0.3 cents at 61.71 cents per lb, while July
fell by 0.12 cents at 63.64 cents per lb on
renewed selling. Local official spot rates on the
other hand were firmly held at the last levels
amid a considerable decline in the ready business.
Unconfirmed reports said about 3,000 bales, both
inferior and fine types from the southern Punjab
ginneries changed hands between Rs2,700 and
Rs2,950 per maund without 15 per cent sales tax.
The following are Friday'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 2,900 3,335.00 50 3,385.00
Equivalent
40 kgs 3,108 3,574.20 50 3,624.20.
The DAWN
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Pakissan.com; Advisory Point
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