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Brisk buying in cotton at lower rates
KARACHI,March30: Brisk buying was witnessed in the
cotton market on Monday at reduced rates. The
buyers staged a comeback in a big way to cover
their forward sales of yarn.
About 15000 bales changed hands in the ready
section at Rs2900/3000 for high-grade lint. Low
grade fetched Rs2500/2675.
As speculation about the size of the crop has come
to an end and a crop exceeding 10 million bales is
a foregone conclusion, the ginners further reduced
the asking prices to attract buyers. The spinners
rushed to cover the forward sale of yarn for the
quarter ending June 30,2004.
Brokers said that the size of unsold cotton is the
most important factor directly affecting the lint
prices. With the release of the PCGA report in the
first week of April, the final crop figure will be
well known.
Sowing of the new crop is already in progress in
lower Sindh while preparation of land and
arrangement of necessary inputs are in hand in
central Sindh.
The government is presumably fixing the 2004-05
crop target at 11.4 million bales. This is not an
over-ambitious target but quite realistic and
achievable, say the experts.
Meanwhile, the market circles are anxiously
waiting for the final cotton report of 2003-04
cotton season, which is likely to be released in
the first week of April by the Pakistan Cotton
Ginners Association.
The most important figure would be of unsold
stocks, which would guide the cotton market. Some
circles think that the unsold stocks are much more
than what is reported by the PCGA.
However, unsold stock of 1.3 million bales by the
end of March will exert pressure on cotton prices,
which may tend to ease further in the wake of weak
prices and poor off-take of yarn.
During the whole last week the cotton market
remained dull with modest transaction reported
daily.
The spinners were not showing much interest in
cotton purchases in view of slack demand and weak
prices of cotton yarn in local as well as
international market.
Better grade cotton was selling at Rs2900 to
Rs3000 per maund, while average grade traded at
2800 to Rs2900 and low-grade low micronaire at
Rs2500.
In view of the sagging prices of lint, seed-cotton
prices of leftover stocks such as those in Umerkot
in Sindh or in Haroonabad in the Punjab also
became bearish.
The price of seed-cotton reportedly ranged between
Rs850/900 to Rs1100 per 40 kg according to quality
in Sindh. In the Punjab also, the price suffered a
setback and stood at Rs900/1200 per 40 kg.
The domestic textile mills have acquired 9.5
million bales of cotton from local and foreign
sources till now.
Some mills have also settled their import booking
of cotton bought from various foreign origins but
these quantities are not deemed to be very large
because good quality is still needed by leading
spinners to produce export quality yarn.
The domestic mills’ lint requirement is projected
at another 3 million bales at least to last them
out before the advent of the new crop.
In apprehension of dwindling supplies of good
quality lint and widening demand-supply gap
leading to price hike, the spinners made hectic
purchases of lint at prevailing low prices.
The official spot rate remained unchanged at
Rs2950. Ready business stood at 15,000 bales 8000
bales were from Singh and the rest from Punjab.
Of Sindh cotton, 500 bales Shahpur Chaker was sold
at Rs2675, 600 bales Rasulabad at Rs2550/2565 and
6000 bale upper Sindh at Rs2550/3000.
Of Punjab cotton, 1000 bales Hasilpur changed
hands at Rs2900/2950, 1000 bales Karorpucca at
Rs3000/, 200 bales Rajanpur at Rs2950, 400 bales
Sadiqabad at Rs2500, 1200 bales Bagh-o-Bahar at
Rs3000, 3200 bales Rahimyar Khan at Rs3000 and 200
bales Rahimyar Khan at Rs2850.
The News International, Pakistan |
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Pakissan.com; Advisory Point
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