Ginners of Sindh and Punjab would not be cowed down by the prevailing situation in the market and stick to their quoted lint prices as cotton futures were bound to turn in their favour, President Pakistan Cotton Ginners Association Mohammad Azam Warriach told Business Recorder on Saturday.
Analysing the current mood and physical business in the cotton market, he said that some people thought that with 50,000 bales sale tender of Trading Corporation of Pakistan and 2-3 cents per pound decline in the New York cotton futures, the local market would get depressed and ginners would dispose of their stocks (about 1.7 million bales) in panic at lower prices, but this did not happen.
The PCGA president claimed that TCP was selling its old stock of inferior quality as compared to their high-quality lint, therefore very few market players were taking much interest in the tender, and furthermore New York cotton futures have now recovered from the previous lows and were being quoted higher by 1 to 1.50 cents.
Azam said that according to the countrywide PCGA report of 28th February, the seed cotton arrivals of the season were 12.306 million bales as against the domestic consumption of 15.9 million bales.
He estimated that even if 1.5 million bales of imported lint was included in the domestic stock, there would be a shortfall of about 2 million bales, therefore there was no reason for the ginners to sell their lint, which cost them Rs 2500-2600 per maund at a lesser price.
"The imported lint would cost around Rs 2,800 to 2900 per maund to the textile mills, therefore we can wait since there are five to six months left in the arrival of the new crop," he added.
The PCGA chief said that during a "cotton vision" and "crop assessment" meeting with Federal Minister for Food and Agriculture last week, some senior members of All Pakistan Textile Mills Association (Aptma) said that they were converting their production more towards cotton because of high polyester prices.