Lint prices remain strong on short supply during week


KARACHI: Trading remained firm on growing demand and short supply of cottonseed to ginneries, traders at Karachi Cotton Association (KCA) said on Saturday.
Buyers purchased selective lots, as most of the cottonseed supplies remained wet in Sindh, while buying in Punjab stations remained firm during past week, traders said. KCA committee increased spot rate by Rs 400 per maund to stay at Rs 7,400 per maund in order to support the market sentiments at par with international price, floor brokers said.
The physical prices remained above Rs 7,400 per maund to Rs 7,450 per maund depending on grades, they said.
The correction in New York futures market and yarn buying by China in the international market stabilised the prices in Pakistan as well, said analyst Shakeel Ahmad.
He said in Punjab stations, potential buyers with strong liquidity bought fine grade on competitive prices during past week. Ahmad further said mills and spinners in Punjab and Sindh stations bought lint of all grades on slightly higher price on back of short supply and wet cottonseed supplies.
Rains in Sindh and Punjab cotton belt damaged around production of 2 million bales with 75 percent of Sindh losses, besides slow influx of cottonseed in the ginneries slowed down the supply, said Ahmad. He said during trading past week, supply chain remained slow with wet conditions that also cast impact on cotton bales size and weight.
He said small and medium sized sellers in Punjab and Sindh stations bought all kind of lint on competitive price around Rs 6,700 per maund to Rs 6,900 per maund while buyers with higher liquidity made deals with weak ginners on lower than Rs 5,900 per maund to Rs 6,500 per maund during past week. The private sector commercial exporters remained selective in making deals for all grades and more than 75 percent of the total sales took place in Punjab stations during the past trading sessions. During past week around 350,000 bales changed hands as compared to 300,000 bales in previous week.
Ahmad said some deals between sellers and mills also changed hands in old crop around Rs 6,200 to Rs 6,500 per maund in Punjab stations.
He said ginning factories in lower Sindh were still close due to flushing of rainwater, however ginning factories in upper Sindh have started functioning.
Despite all odds, Kotri station in Sindh remained active with sizeable trading in cottonseed and raw cotton and the buyers purchased lots around Rs 6,600 per maund to Rs 7,000 per maund.
Ahmad said half of the total transactions in Sindh and Punjab stations changed hands on early deals delivery basis, which did not allow the spot rate committee to readjust spot rate.
On Saturday KCA readjusted the spot rate downward by Rs 100 per maund to stay at Rs 7,300 per maund. Around 17,000 bales changed hands with more than 70 percent Punjab’s share and raw lint changed hands around Rs 6,250 per maund.