KARACHI, March 17: The cotton market started moving on the descending path on Tuesday with the lint prices losing more ground.

The official spot rate was marked by Rs50 per maund at Rs2,950. However, in the ready section, any major decline was avoided in view of the upturn in New York cotton futures prices and some improvement in the demand for domestic lint at current lows.

About 10,000 bales of cotton changed hands on Tuesday at Rs2,800/3,000 for high grade lint. Some average quality cotton also fetched Rs2,925 on deferred payment basis.

The reduction in asking prices has found a favourable response from the spinners in the shape of big rush for the available lots at prevailing lows that conform to the export parity of yarn.

The surge in New York cotton also forced the buyers to cover their positions hurriedly before the local ginners raise the prices in sympathy with New York cotton. However, it is too early to say that the stand-off between the buyers and sellers has ended.

The lifting of big lots indicated the presence of leading spinners in the market as the drastic fall of Rs100 in the price has made cotton quite attractive. In case, the positive turn in New York cotton futures lasts, the local ginners will definitely take the cue from it and enhance their asking prices also. This explains hasty buying by the spinners who have yet to cover their forward sales.

But the brokers rule out the possibility of return to last December boom condition when the ginners reaped a rich harvest on the back of turmoil in world cotton and rumour of colossal damage to local cotton crop due to pest attack.

The fall of New York cotton futures below the benchmark of 70 cents was a wake up call to the local ginners who ultimately gave in to the spinners’ pressure to reduce the cotton prices to suit their (spinners) export parity idea.

Ready business stood at 10,000 bales out of which 4,000 bales were from Sindh and the rest from Punjab.

Of Sindh cotton, 400 bales Shahdadpur were sold at Rs2,750, 400 bales Kot Diji at Rs2,900, 400 bales Nawabshah at Rs2,925 (one month credit), 1,000 bales Daharki at Rs3,060 and 1,000 bales Mando Dero at Rs3,000.

Of Punjab cotton, 1,000 bales Khanewal changed hands at Rs3,000, 3,000 bales Haroonabad at Rs2,800/2,850 (low mic) and 1,000 bales Mailsi at Rs2,900.

The News International, Pakistan