Buyers consolidate positions on grade issue, shrinking stocks at lint market

KARACHI: Cotton trading at the lint market remained selective on grade issue while buyers with liquidity strengthened their inventories amid a firm spot rate, fibre traders reported. In addition to buying, second grade lint from old crop stocks also changed hands on premium prices during the trading session in Punjab and Sindh stations, floor traders stated.

The Karachi Cotton Association (KCA) kept the spot rate at Rs 6,750 per maund to support ginners withholding raw grades to capitalise on their proceeds above baseline prices. Traders said physical prices were also moving steady as deals were made above Rs 6,800 per maund for better and second grade lint. "The shrinking stocks and delayed sowing of cotton in some parts of lint growing areas in Punjab and Sindh has resulted in the rise of lint prices", a senior KCA trader and fibre analyst, Shakeel Ahmad stated. He believed the refusal of Indian traders to materialize orders of Pakistan lint imports in time has also been a major cause in raising the domestic prices.

However Ahmad reported that growers in Sindh started sowing fresh crop in some cultivation areas and demanded a supply of certified cottonseed and the regular release of irrigation water into the canals. Better lint remained in high demand and prices remained around Rs 6,800 per maund to Rs 6,825 per maund. Deals at Sindh and Punjab stations for raw grade took place above the spot rate while around 690 bales changed hands during the trading session. The stations including Shahdadpur, Dadu, Rahimyar Khan and stations at upper Sindh, southern Punjab and Khanpur remained active in dealings and mill to spinners deals also changed hands in Punjab.

The deals changed hands at around Rs 6,025 per maund to Rs 6,475 per maund. In the international market, future contracts for May 2017 at New York Cotton Market were hovering between 78 cents per pound, July at 79 cents per pound while Cotlook A Index remained intact above 85 cents per pound.