KARACHI, Nov 26: Cotton prices on Saturday were adjusted in line with those at which physical trading was being transacted between the ginners and spinners for the last couple of sessions.
But mill demand failed to pick up beyond the modest level of about 15,000 bales, creating financial problems for the ginners and worries over the large unsold stocks, brokers said.
“An unsold stock of over 2m bales is a massive one in the backdrop of a reported short crop and ginner financial capacity to clear the outstanding dues of the growers,” they said, adding “its negative fallout could be decline in the prices”.
A leading cotton analyst attributed the decrease in prices to falling mill demand as barring some big ones, their weaker links have not any adequate financial resources and export outlets against which to build up long positions in lint to give the needed push to the market.
“Leading spinners and mills claim both the local and foreign demand for cotton yarn and textiles has considerably fallen over the last couple of weeks, which cause the latest slowdown in mill buying”, he added.
The market appears to be the victim of falling mill demand for various reasons, notably piling of finished stocks in their godowns and the allied financial problems to take part in lint buying operations until the foreign demand of textiles and yarn picks and the ancillary industry resumes its normal buying, they said.
Away from the local market, the grower is dictating his own terms for selling phutti. The selling rate of phutti above Rs1,100 per 40 kg is not compatible with the selling rate of lint as spinners are not inclined to oblige and offer sharply lower prices, they added.
Thus a vicious circle seems to be ruling the market in which no one is winner, and ginner and spinners being at the receiving end, some others commenting on the current no-win situation in the cotton trade said.
Official spot rates were quoted around Rs2,350 per maund, off Rs25 from the previous levels but most of the deals were done well above them. The following are notable among them:
SINDH VARIETY: 1,000 bales, Dharki, Gothki and Mirpur Mathelo at Rs2,400.
PUNJAB TYPE: 4,000 bales, Bahawalpur, 1,000 bales each Jahania, Bahawalnagar, 400 bales, each Muridwala and Rajanpur at Rs2,375, 1,000 bales, Vehari at Rs2,365 to 2,375.00, 3,000 bales, Rahimyar Khan and 2,000 bales, Saidiqabad at Rs2,385 to Rs2,400, 1,000 bales, Pakpattan at Rs2,400.
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