By Our Staff Reporter

KARACHI (February 25 2004): Cotton market on Tuesday showed steady trend as ginners again kept to the sidelines followed by reports of higher world prices and pressure on ready supplies.

Local ginners who were a bit jittery a day earlier and tried to sell their low-mic stocks around the spinner price perceptions appear to be a bit confident about the future market outlook, brokers said.

Unlike the overnight session, ready offtake was light as ginners raised their asking prices for both the inferior and fine lots in line with the New York cotton futures, they added.

New York cotton futures on Monday finished higher 1.01 and 0.39 cents per lb for both the maturing March and the ruling May contracts at 68.70 and 70.65 cents per lb, respectively.

On the local market some of the deals were also finalized on the higher side around Rs3,200 per maund excluding 15 per cent sales tax as some of leading spinners covered positions against their forward sales of cotton yarn for March shipments, market sources said.

But both the ginners and the spinners were mostly playing safe and did not indulge in hasty selling or buying as both hoping rise and fall in prices, they added.

Ginners, notably weaker among them, may be worried over the larger unsold stock of about 1.8m bales lying with them in their godowns but no one was inclined to sell below their asking prices.

"The battle of wits between the spinner and the ginner appears to be at its peak but it is a no-win situation, although ginners are in a slightly better position owing to a short crop below the mill annual demand.

During the last couple of years mill demand has risen to 12m bales plus owing to higher export of value-added textiles but on the other hand total crop figure is far below it even if the higher benchmark of 10m bales is taken as a takeoff point, cotton analysts said.

Meanwhile, Food and Agriculture minister's Monday visit to the KCA has raised hopes that hedge trading in cotton may be resumed possibly by August after new crop from the lower Sindh will be available. The KCA has already finalized rules and regulations to start forward trading.

Official spot rates were again held unchanged at the last levels in line with those at which ready business is being transacted. Ready offtake was slow as till late in the evening about 2,000 bales changed hands, the following being some of the notable deals: 400 bales, fine lots, Sadiqabad at Rs3,200 and 600 bales, low-mic at Rs2,850.

DAWN