Buyers at lint market made forward deals due to poor grade and low volume

During the trading sessions in the past week, buyers at the lint market made forward deals on the back of grade issue and low volumes at around Rs 4,600 per maund to Rs 4,625 per maund, traders said on Saturday.

The buyers remained eager for fine grades at main stations of Punjab and Sindh, while majority of the ginneries produced all grades on the back of moderate influx of cottonseed.

Prices remained within reach of the buyers amid some cautious activity. The Karachi Cotton Association’s (KCA’s) spot rate remained firm to stay at Rs 4,500 per maund.

Trading at the leading stations also remained dull due to paucity of fine and second grade while power outages at the ginneries and textile units kept the activities lull.

Floor brokers said that during the past week, buyers made deals for all grades on cautious note besides demand for fine grades remained higher.
However, the buyers made forward deals for fine bales besides purchasing all grades in order to fortify their inventories.

During the trading sessions, the mills bought fine grade while the potential buyers remained entangled in price war due to slower arrival of cottonseed, floor brokers said.

The trade people said that price stability in cottonseed would provide an opportunity to the ginners to start bargaining, but most of them would prefer to negotiate on normal terms.

Shakeel Ahmad, a fibre expert said that the prices of better grade cotton would likely to stay firm at around Rs 4,625-4,750 per maund, as most of the leading ginners would bring out stockpile of better grades. This would happen probably due to the demand from textile sector for production of textile made-ups and reportedly there would not be plenty of better grades by the end of November.

He said that during the past week, arrival of better grade cottonseed at Punjab and Sindh stations remained thin and general prices stood in firm frame, while trading on Saturday remained dull in all stations and around 200 bales changed hands during trading session in Punjab and Sindh stations.

During trading sessions, most of the medium sized ginning units (12) ginned all grades as they produced more than 6,900 bales.

Most of the deals were found to have changed hands at around Rs 4,500 to Rs 4,550 per maund while second grade lint fetched around Rs 4,575 per maund.

On global front, the New York October Futures 2015 closed at around 67 cents per pound while Cotlook A index was hovering around 70 cents per pound.