960418

Karachi cotton

mostly closed

DR ZAFAR HASSAN

LAHORE: Barring a stray transaction reported from here or there, the cotton business was mostly closed on Thursday at Karachi due to a hartal (strike) observed there on the call of the Mohajir Qaumi Movement (MQM) to register their resentment against the new Local Government Law passed in the Sindh Assembly. Furthermore, the holiday fever has already started to grip the populace in light of the forthcoming Eid-ul-Azha festivities to commence at the end of this month. For most of next week, the truckers shall be moving sacrificial goats from the rural areas to the various urban centres of the country, thus depriving the cotton trade of its main mode of transporting cotton, viz the trucks.

Even otherwise, the airjet weaving loom industry is said to be still suffering from lack of adequate sales. In the knitting sector, only those units are faring well who have the international business houses with franchise labels to back them, and also who have the necessary wherewithal to produce good quality knit goods and also have the necessary credit to back them up. Only the second hand sulzer looms are faring well, basically due to the fact that they have no bank changes to pester them with excessive financial changes.

It was reported by the commission agents in Karachi that upto now about 12000 to 15000 bales (of 480 lbs each) have been booked for import to relieve the lint shortage in Pakistan which is likely to persist over the next four months or so. Some more cotton import deals, estimated variously from an additional 10,000 to 20,000 bales are said to be under the active negotiation of international merchants.

No spot rates for cotton were filled by the Karachi Cotton Association (KCA) on Tuesday due to lack of quorum ready business in raw cotton is expected to remain slack for the next 15 days or so. In some of the ready cotton transactions reported on Thursday, 500 bales each from Harunabad and Tandlianwalla, and 800 bales from Chishtian, all are said to have sold at Rs. 2350 per maund each. Thus the much-predicted flareup in lint prices is not visible at present, but may transform itself into reality in early May, 1996 when the prolonged holidays will be over.

On the foreign cotton front, the New York futures prices have suffered a rather sudden and sharp fall in values over the past one week or so due to funds and speculative selling, which in turn is reported to have compelled the international shippers to lower the cotton offerings for shipment cotton. At the middle of last week, the New York cotton futures values had already fallen to the lower 80's cent per pound range. Thus a wide gulf has been created between the price ideas of the cotton shippers on one hand, and the importing textile mills on the other. As such, both the buyers and the sellers are seeking a fresh direction towards which the cotton futures prices would travel.

Last week the sale of 10,000 bales of cotton from Argentina, strict low middling (slm) in grade and 1-1/16 inch in length has been reported from Liverpool.

Liverpool further adds that sluggish conditions are continuing in most trading markets for most upland styles where the mills demand for cotton is limited. In fact, the Japanese mills are also said to be displaying a bearish disposition, though some of them are said to have picked up considerable quantities of lint from Australia and Far Western United States recently.