KARACHI: The Karachi cotton market observed a firm trading session, while most of the weak ginners brought out their low grade lint on low margins amid firm spot rate with higher demand for fine lint, traders at the Karachi Cotton Association (KCA) said Tuesday.
Ginners with weak withholding power brought out their stocks on minimum returns, while spinners purchased lint of all grades for blending purpose on competitive prices, floor brokers said. Majority of the buyers in Punjab and Sindh bought stocks on lower than spot rate during the trading session, market sources added.
Mills in major stations made forward deals in second grade lint, as they need to strengthen their inventories for a lean period, traders said.
The KCA maintained the spot rate at Rs 10,500 per maund, while physical prices remained in the range of Rs 11,000 to 12,100 per maund in Punjab and Sindh stations, floor brokers said. “The mills and spinners made deals in coarse lint for around Rs 8,000 per maund to Rs 9,000 per maund,” analyst Shakeel Ahmad said. “Most of the mills and spinners in Punjab availed the chance of having low price deals with ginners.”
Ahmad said the ginners in major stations were still waiting for their dues on mills and spinners, which were stuck up due to paucity of funds.
“This is because the banks have downgraded the level of loan facility on back of lower grades’ stocks,” he added.
The lint market will likely to witness a downward correction on back of shortage of fine lint besides second grade lint in the next trading sessions, he added.
He said trading in Punjab remained firm where 9,000 bales changed hands, while leading buyers in Sindh made some forward deals on a month credit above Rs 11,400 per maund.
The New York Cotton Market March futures remained stable as May futures hovered at 188 cents per pound and July 167 cents per pound, he added. Cotlook A Index closed at 221 cents per pound.
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