It is now nearly ten days that cotton prices in the domestic market have continued their downward journey. Buyers have been exhibiting only occasional interest to buy more cotton.
Lint prices have recorded a decrease of about Rs 50 per maund (37.32 kgs) in the ready market since the 'inception of this week.
According to trade talk, now there are increased arrivals of seed-cotton (kapas/phutti) being reported from several areas in both Sindh and Punjab which phenomenon is dampening the price sentiment in the market.
Brokers have reported from Karachi that seed-cotton in considerable quantities is also arriving from the riverine areas (kutcha areas) so that this arrival from the sizeable acreage along the riverbeds is augmenting the regular supply of cotton from the traditionally cultivated areas.
Traders now point to a possibility that the net output of lint this year could even exceed 9.5 million bales on an ex-gin basis during the current season (2003-2004) in Pakistan.
The mostly neutral and indifferent behaviour of the New York cotton futures market which has lacked any credible stimulus in recent weeks except for the sliding US dollar has kept the prices mostly range-bound.
Therefore, while the spinners in Pakistan have kept up their steady purchase of cotton from different global origins, they hardly appear to be in a hurry to cover their remaining requirements, which may last them till the end of the current season viz July 2004.
Therefore, it appears quite clear that turnover in the ready cotton market has reduced and the prices of lint have gone down by about Rs 100 since the last seven days or so.
Perhaps, the growers or the ginners, or other intermediaries (Arthis) were holding on to this precious produce in the hope of availing higher prices for cotton.
But now with increased hope of better output in Pakistan and relatively comfortable stock position of several of the larger mills, lint prices could remain at present levels or even sag further.
Traders are est1mating that up to the January 15 seed-cotton (kapas/phutti) for about 9 million lint - equivalent bales have, already arrived into the ginning factories throughout the country from which the mills are likely to have picked up about 7 million domestic size bales.
The exporters are estimated to have lifted nearly 200,000 bales, while the ginners may still be retaining about 1.8 million bales of unsold cotton with them in both loose and pressed form.
The mills thus need to procure another 3.5 million to 4 million domestic size bales in addit1on to what they have already booked abroad in case they are to consume something close to 12 million bales (165 kgs/170 kgs).
The price idea for ready lint from Mirpurkhas in Sindh was reported to have ranged from Rs 2,700 to Rs 2,750 per maund (37.32 kgs) without the 15 percent sales tax; in Sanghar, Shahdadpur or Tando Adam, cotton prices ranged from Rs 2,750 to Rs 2,900 per maund; in Nawabshah the ginners were quoting Rs 3,000 to Rs 3,050 for a maund of their cotton; cotton in the Khairpur district was being quoted from Rs 3,100 to Rs 3,125 per maund; the price idea for lint from upper Sindh (K-68) was said to be about Rs 3,200 per maund (37.32 kgs), while in the Punjab the cotton prices reportedly ranged from Rs 2,900 to Rs 3,,250 per maund.
The ready market continued to emit weak signals later in the evening.
Seed-cotton (kapas/phutti) prices were also down on Thursday.
Thus the seed-cotton prices in Sindh ranged from Rs 1,100 to Rs 1,400 per 40 kgs, while the seed-cotton prices in the Punjab were said to have ranged from Rs 1,150 to Rs 1,450 per 40 k1logrammes.
In line with the weakening tendency in the cotton market, the Karachi Cotton Association (KCA) reduced the ex-gin price of grade 3 cotton by Rs 25 on Thursday and determined it at Rs 3,200 per maund (37.32 kgs) and likewise notified the spot rate at Rs 3,730 per maund including 15 percent sales tax and the upcountry expenses.
Brokers said in the evening that cotton prices continued to remain under pressure due to better perception of the domestic crop outlook and also because of tighter finance position reported in the market.
In the evening, there was a dearth of buyers in the market even as the ginners were willing sellers.
Comments
Comments are closed.