LAHORE (March 12 2004): Cotton prices continued to sag further this week which has not only disturbed the ginners seriously, but also created difficulties for several spinners holding long positions.

Except for two or three sporadic spikes in cotton prices, most of the time the lint values have continued their downward journey since the beginning of this year.

With the breach of Rs 3,000 per mound for premium class of cottons now a definite reality without counting the sales tax, those holding long positions have started becoming panicky.

Brokers said on Thursday that tremendous fall in cotton future prices in New York over the previous several sessions except some gains made on last Wednesday, and domestic cotton output appearing to come close to 10 or more million bales on ex-gin basis, has led to a unmistakable regression in cotton prices.

The sales prices for many textile items have also decreased considerably.

With this depressing scenario, the sale momentum of cotton has kept withering over the past several weeks, enquiries for cotton have become sparse while a disturbing quietness continues to envelop the market.

According to some brokers, there are still some quantities of seed-cotton (kapas/phutti) which are reportedly arriving into the ginning factories from Dera Ghazi Khan in Punjab and some other stations in Sindh.

According to agents for international merchants in Karachi, the offers for most varieties of shipment cotton from the CIS (Commonwealth of Independent States), West Africa and the United States have suffered a decline of about 4 to 5 cents a pound recently.

Some analysts are projecting that because the growers received the good return this year (2003-2004), they are likely to plant more cotton in many countries which could restrain prices from rising in the forthcoming season (2004-2005).

Anyhow, it remains too early to project anything at present due to many uncertainties.

Some of the imponderables include the political impasse in Iraq, the burgeoning deficit in the United States and also the forthcoming presidential elections in the United States in November.

Thus the domestic cotton market is passing through a depressed condition and is in a morose frame of mind. It is likely that lint prices will not even hold at the present rates but will taste still lower levels. The prices for imported cottons have also been cut down at several origins.

In this insipid atmosphere, the only cheerful note is the visit of the Indian cricket team, which has arrived after a long time and is engrossing the minds of all and sundry.

For whatever little seed-cotton (kapas/phutti) which is still arriving from certain areas, its prices have gone down.

Thus the price of seed-cotton from Sindh reportedly ranged from Rs 900 to Rs 1,050 per 40 kgs, while in the Punjab they are said to have ranged from Rs 850 to Rs 1,100 per 40 kilogram's.

However, the notable point is that few ginners seem to be interested to pick up more seed cotton at present even at these depressed rates.

Though no sale of cotton was reported till late afternoon on Thursday, the price idea for lint from Mirpurkhas in Sindh ranged lower from Rs 2,450 to Rs 2,500 per mound (37.32 kgs) without the 1.5 percent sales tax; cotton from Sanghar, Shahdadpur or Tando Adam was being quoted from Rs 2,450 to Rs 2,600 per mound; cotton from the Nawabshah district was being offered from Rs 2,750 to Rs 2,800 per mound; the price idea of cotton from the Khairpur district reportedly ranged from Rs 2,650 to Rs 2,850 per mound; in upper Sindh (K-68) cotton prices were being quoted from Rs 2,800 to Rs 3,000 per mound, while in the Punjab the price idea for cotton reportedly ranged from Rs 2,400 to Rs 3,000 per mound, according to the quality.

Brokers added from Karachi that yarn, fabric as well as cotton prices were all caught up in a suppressed syndrome which had given rise to a weird kind of quietness to the market, China's withdrawal from world markets and its rumoured cancellation of some earlier purchases had clobbered the cotton futures in New York perhaps renewed interest and re-entry of China in various cotton markets could strengthen the price-line later on.

Courtesy Daily Business Recorder