Cotton prices moving further lower on Tuesday after dull trading activity at cotton market. Falling cotton prices also impacted phutti (seed cotton) negatively, with Punjab quality being quoted between Rs2,700-2,900 and Sindh variety in the range of Rs2,700-3,300 per 40kg. Previously phutti prices were being quoted between Rs2,900-3,500 per 40kg.
However, some buying interest was noted at the lower level as many spinners preferred to cover up their positions amid falling cotton prices. Another factor which discouraged buyers from covering up their position was slow demand for cotton yarn in the domestic market.
The textile spinning sector is currently in distress as it faces the challenge of high cotton inventory and slow cotton yarn off-take in local market.
The Karachi Cotton Association (KCA) spot rates were lowered by Rs100 to Rs7,400 per maund. The following deals reported to have changed hands on ready counter were 400 bales, Gambat, at Rs6,700; 400 bales, Hingorja, at Rs6,800; 1,100 bales, Hyderabad, at Rs6,500; 600 bales, Shahdadpur, at Rs6,250; 4,000 bales, Mianwali, at Rs6,400 to Rs7,100; 1,000 bales, Bakhar, at Rs7,000; 600 bales, Liaquatpur, at Rs6,900; and 400 bales, Kachiwala, at Rs6,700.
Dull trading also continued at the Karachi Cotton Exchange on Tuesday, while spot rates decreased Rs100/maund. The spot rates fell to Rs7,400/maund (37.324kg) and Rs7,931/40kg. Ex-Karachi rates also decreased to Rs7,545/maund and Rs8,086/40kg after an addition of Rs145 and Rs155 as upcountry expenses, respectively.
A total of eight transactions were recorded of around 5,000 bales at a price of Rs6,250 to Rs7,100/maund. Deals were recorded from Gambat, Hingorja, Hyderabad, Shahdadpur, Mianwali, Bakhar, Liaquatpur and Kachiwala.
According to an analyst, the local market remained down in trade with lower rates, as yarn prices were also down with no buyers. Imported cotton is better in the quality, while prices are lower than the local market, so buyers are going for it.