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Trading fails to pick up on cotton market
KARACHI, March 25: The cotton market on Thursday
passed through another dull trading session as
spinners and mills kept to the sidelines despite
being in short supply position. An increase of
Rs75 per 40 kg to Rs925 per 40 kg in phutti price
from the previous Rs850 for the new crop , sowing
of which will start from May 15, could boost lint
price further higher in the coming weeks.
During the current season, growers had sold phutti
at an all-time peak level of Rs1,650 per maund
followed by reports of a short crop owing to a
late pest attack in the Punjab cotton belt.
Leftover stocks with them are still being sold
above the newly fixed official support price.
Floor brokers said the spinners were keeping to
the sidelines anticipating further decline in
prices in line with the international markets, the
chief inspiring factor being the recent turmoil on
the New York Cotton Exchange amid violent
either-way price movements.
The fact that unlike previous years world supplies
of lint are more than the actual annual
consumption needs of the textile industry the
world over is also keeping international prices
unsettled, they said.
However, the local ginners are not inclined to toe
the world price trend and are inclined to sell
their unsold stock according to their phutti
parity levels. "Both the spinners and the ginners
appeared to be locked in a price battle," market
sources said. "The former is basing their
perceptions on a short crop and an ultimate
increase in prices, while the latter is guided by
the international situation and its likely
negative impact here."
The current standoff between the two could
continue for another couple of weeks until both
have to follow the objective situation and the
golden rule of supply and demand, they said.
The final crop figures will be available by the
first week of the next month, and they are
expected to set the price trend in the weeks to
come prior to new crop arrival from the lower
Sindh cotton belt.
Meanwhile, ginners appear to be least worried over
their unsold stocks totalling about 1.2m bales of
the same amount as they hope a better price during
months of May and June well before the arrival of
new crop from the lower Sindh in modest
quantities.
Official spot rates did not show any change in the
absence of active business in the ready section
and were held unchanged. Ready offtake was also
light as till late in the evening about 3,000
bales of low-mic lint changed hands between
Rs2,700 and Rs2,850, mostly from the central Sindh
cotton belt.
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 2,975 3,421.25 50 3,471.25
Equivalent
40 kgs 3,188 3,666.20 50 3,716.20.
The DAWN |
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Pakissan.com; Advisory Point
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