KARACHI, Nov 18: The cotton market on Friday resisted fresh decline as arrivals of phutti into ginneries were in line with analysts’ predictions, showing a fall against the last year’s comparable figure.
“The market has already absorbed the negative fallout of earlier speculated higher arrivals and stayed firm after having suffered a decline of Rs45 per maund during the last two sessions,” analysts said.
The latest arrival figures released by the Pakistan Cotton Ginners Association for the fortnight ending Nov 15, 2005, rose to 6.802m bales from the previous 4.737m bales, showing an increase of 2.064m bales.
Out of the total, mills have purchased 4.2334m bales and exporters 50,000 bales, leaving an unsold stock of 2.518m bales with ginners.
The higher unsold stocks showing an increase of about 0.7m bales could have a negative impact on the bargaining capacity of the ginners as far as selling prices are concerned, brokers said, adding: “As more than Rs25 billion are tied to them, their weaker links may resort to panic selling, pushing prices further lower in the coming sessions.”
However, the latest figures show that the crop may be well below the target of 15m bales and what impact it will have on the prevailing prices will be known by early next month, they said.
Meanwhile, a fall below the 50-cent benchmark price of the ruling December contract on the New York Cotton Exchange was welcomed by the spinners and hoped further fall to make imports more competitive in case they have to opt for imports.
While the Dec contract fell by 0.15 cents, the forward March rose by 0.10 cents per lb at 49.64 and 52.96 cents per lb, respectively. The persistent fall in futures contracts has an adverse impact on the export parity level of local textiles, the analysts said.
The local official rates resisted fresh decline and were held unchanged, although most of the deals in the ready section were done above them.
Ready offtake was active totalling about 10,000 bales as under:
SINDH VARIETY: 400 bales, Shahpur Chakkar at Rs2,375; 800 bales, Sanghar at Rs2,275 to Rs2,300; 200 bales, Shahdadpur at Rs2,325; 200 bales, each Sainjoro and Jhole at Rs2,290.
PUNJAB TYPE: 200 bales, DG Khan at Rs2,375; 200 bales, Hasilpur at Rs2,410; 1,000 bales, Sadiqabad at Rs2,420 to Rs2,425; 3,000 bales, Bahawalpur, 1,200 bales, Ahmedpur East, 200 bales, Uch Sharif and 400 bales, Lodhran at Rs2,400; 200 bales, Kehror Pacca and 400 bales Haroonabad at Rs2,375; 800 bales, Shabbirabad, 1,200 bales, Jalalpur, 400 bales, Sardar Lund, 600 bales, Khanewal, 600 bales, Jotoi, 200 bales, Kabirwala and 400 bales, Chinigoth at Rs2,425.
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