KARACHI: Heavy buying originating from needy spinners suddenly pushed cotton prices to a record high level on Tuesday. The final report of phutti (seed cotton) arrivals showing production at fewer than 10 million bales created panic buying.
At the outset there was panic buying which pushed lint price to a seasonal high of Rs5,730 per maund. The short supply of quality lint due to depleted cotton stocks held by ginners also generated some intense buying, brokers said.
The cotton production report issued by the Pakistan Cotton Ginners Association (PCGA) a day earlier placing final production at 9.78m bales — translating into a year-on-year shortfall of 5.095m bales — created panic in the market where buyers rushed to book large lot deals.
However, there was acute shortage of quality lint as depleted stocks at 350,000 bales held by ginners left many spinners in a quandary as they will have to wait for long period before the arrivals of next crop in late July or early August.
According to market sources, the world cotton markets also remained bullish including New York, China and India on reports of expected higher consumption of cotton next season.
The cotton yarn and fabrics are also getting higher orders, indicating that the cotton economy world over would come out of current recession and next season could be quite favourable.
The KCA raised its spot by Rs100, to Rs 5,450 per maund.
Major deals on ready counter were: 600 bales from Ghotki (at Rs5750 per maund), 2500 bales Ranipur (Rs5000), 600 bales Rohri (Rs5050), 1200 bales Jalalpur (Rs5500 to Rs5600), 600 bales Rahimyar Khan (Rs5400), 400 bales Bahawalpur (Rs5057), 400 bales Lodhran (Rs5250), 4530 bales Mianwali (Rs5700 to Rs5730) and 400 bales Shujabad (Rs5600).