Grade concerns take lint prices downward at cotton market

KARACHI: Cotton prices continued to witness a downward revision on the back of low-grade stocks with growing demand for fine lint on a week on week basis, traders at Karachi Cotton Association (KCA) said Saturday.
The spot rate remained stable at Rs 10,500 per maund with higher physical concern price around 11,500 per maund during trading sessions past week while Punjab remained volume leader, traders said.
During the past week the spot rate shed Rs 1,500 per maund to stay Rs 10,500 per maund Saturday while leading mills and spinners purchased lint on competitive prices while forward deals also took place on a month delivery period, floor brokers said.
"Lint price will further witness a downward correction on the back of low grade and wait-and-see policy by big buyers for further decline in lint prices," lint analyst Shakeel Ahmad said.
"The growers of many stations in Punjab and Sindh have still plenty of phutti (cottonseed), which is of low quality," he added.
The picking for fresh crop 2011-12 will likely start from mid July as 65 percent of the crop has become mature in different sowing stations in Sindh and Punjab, he added.
Pakistan Cotton Ginners Association is hopeful for a bumper crop for next crop season around 15 million bales, its senior member Rana Abdul Sattar said.
"Despite a shortfall of around 1.1 million bales during crop season 2010-11, the country will receive further around 1.10 million bales by the end of May," he maintained.
He said lint stocks in Punjab and Sindh stand at around 500,000 bales but 95 percent is of raw quality.
During the past week, 90 percent of the deals changed hands between textile sector and ginners while 10 percent deals were shared by private sector commercial exporters and spinning sector with the ginning sector.
During past week, around 1.80 million bales changed hands against 1.60 million bales a week back.
On Saturday around 12,000 bales changed hands in Sindh and Punjab stations with more than 80 percent Punjab's share for around Rs 10,500 per maund to Rs 12,300 per maund depending on the grades.
According to reports, NYF May stood at 187.67 cents per pound, July Futures stayed around at 167.51 cents per pound. The Cotlook Index stayed stable at 206.35 cents per pound.

(Source: http://www.dailytimes.com.pk/default.asp?page=2011%5C04%5C24%5Cstory_24-4-2011_pg5_11)