KARACHI, March 4: Cotton prices on Saturday remained stable around the previous levels as spinners and mills kept to the sidelines apparently assessing the impact of lower crop arrivals and the proposed TCP tender for 50,000 bales.
According to market sources after a gap of couple of months, the TCP is expected to resume its sales operation apparently to dispose of half a million bales lying in its godown.
The TCP plans to float a tender for the sale of 50,000 bales of lint on Monday, which is expected to be opened on March 16. Both local mills and foreign buyers are allowed to participate in the tender.
“At this stage it is too early to predict the negative impact of the TCP tender on the local prices but it will certainly slow down the current mill demand,” says a leading cotton consultant, adding “what will determine the future price outlook will be the bids.”
Holding an unsold stock of half a million bales, the TCP sales aim to forestall any speculative rise in prices owing to a short crop and to ensure competitive supplies to the textile sector to boost exports, he added.
But some others said the latest arrival figures showing a fall of 12 per cent over the previous figure of 12.306m bales, about 2m bales lower than the previous total, could boost prices as spinners and mills have still to go a long way to meet the annual consumption needs.
Spinners have so far purchased 10.495m bales, leaving an unsold stock of 1.741m bales with the ginners, still on the higher side reflecting guarded buying by them, they added.
Official spot rates were again firmly held at the last levels in the absence of mill buying as spinners were having an overview of the supply and demand factors.
New York cotton futures on the other hand fell further by 0.58 and 0.22 cents per lb for both the matured March and the ruling May contracts at 54.60 and 54.49 cents per lb respectively.
Ready off-take remained slow as spinners and mills stayed on the sidelines but some of them lifted stray lots from the southern Punjab ginneries at Rs2,550 per maund.
