Uncertainty over final crop figures mar cotton trading
By Our Staff Reporter
KARACHI, May 5: Quieter conditions prevailed on the cotton market on Friday as spinners kept to the sidelines apparently analysing the likely impact of the final crop figures on the future price outlook.
Ready off-take was, therefore, at low ebb as ginners held on to their unsold positions, while spinners anticipating decline in prices adhered to sidelines.
According to final crop figures released by the Pakistan Cotton Ginners Association (PCGA) for the fortnight ended April 30, the total crop figure witnessed an increase of 0nly 6,000 bales at 12.395m bales.
Mill purchases totalled at 11.518m bales, while the private sector exporters purchased 74,400 bales owing to some problems on the export front in the backdrop of uneven price movements of the New York cotton futures.
Floor brokers said spinners were a bit happy over the larger unsold stocks lying in the ginners’ godowns on the perception that prices could ease from the current higher level after weaker ginners tried to get out of the market after having indulged in hasty selling.
“The unsold stock of lint at 0.803m bales is higher than the market expectations and could work against the interest of ginners,” they fear “but their holding capacity could play a dominating role in ensuring them a competitive price.”
Analysts said the general thinking was that unsold stock may have fallen below half a million bale figure but the latest figure tell that spinners and mills made regulated buying in an apparent effort to not allow increase in prices above their export parity levels and successfully managed to keep lid on higher prices.
The figures showed that spinners purchased only 84,000 bales during the last fortnight at 0.803m bales as compared to the previous total of 0.987m bales. The average mill intake in a fortnight is around half a million bales.
How would ginners react to the new development on the supply and demand front would be known during the next week, although leading ginners knew spinners and mills are still short of their annual consumption target.
Official rates were, however, quoted unchanged at the previous level of 2,425.00 but in the ready section some of the deals were done above them.
Ready off-take was slow owing to the absence of mills and fell to 1,500 bales including 300 bales, from upper Sindh ginnery at Rs2,450.
