LAHORE (March 19 2004): Though the lint prices mostly remained at their previous low levels, the volume of daily business reported in the ready market in Karachi reached a respectable figure of 15,000 bales.

After a hiatus stretching over the past several weeks, on Thursday several mills entered the market to capitalise on the lower rates of lint.

Brokers said in Karachi that even some improvement in the prices of cotton futures market in New York in recent sessions may have prompted the spinners to start buying at the prevailing rates which are attractive.

However, several spinners still claim that they had made ample coverage of cotton by having booked sizeable quantities from various foreign origins over the past several months so that they are amply stocked.

Cotton market was easy in the morning because the latest report of the Pakistan Cotton Ginners Association (PCGA) also indicates increased arrivals of seed-cotton (kapas/phutti) into the ginneries which are likely to continue for the next few weeks and could stretch till the middle of April. By the evening, however, cotton rates became steady.

Last season (2002-2003) the Pakistan Cotton Ginners Association (PCGA) had issued its final report of estimated cotton arrivals till the 1st of April, 2003 to be 9,678,401 bales.

According to the Pakistan Cotton Ginners Association (PCGA), this year (2003-2004) seed-cotton (kapas/phutti) arrivals reached the figure of 9,673,389 lint - equivalent bales till 15th of March 2004.

Out of these arrivals, the domestic mills have lifted 8,078,107 bales, while the exporters are said to have procured 177,137 bales.

Out of these quantities, the ginners still hold an unsold stock of 1,418,145 bales, which includes 69,045 lint - equivalent bales of unginned cotton.

These figures now tend to indicate the lint output in Pakistan this year should at least be 10 million or more bales and would thus surpass last year's (2002-2003) production on an ex-gin basis.

The latest assessment of cotton output during the current season (2003-2004) has put to rest any apprehensions of any large damage to the crop, which was being feared during the earlier part of the season.

In fact, there are already reports that because the growers received record rates for their seed-cotton (kapas/phutti) this season (2003-2004) touching Rs 1,600 per 40 kgs, they would be incited to grow more cotton during the forthcoming season (2004-2005).

In fact reports from lower Sindh already speak of preparation for sowing in the southern areas such as Pithoro, Pangrio, Kunri, Samaro Road and Digri.

There are also reports that adequate water is available in the channels so that sowing has already started at several stations.

Therefore, on Thursday the only interesting factor was that the domestic mills had started making enquiries for cotton but the lint prices remained mostly unchanged.

In fact the day ended up with a sizeable business having been conducted so that the ginners should have felt some relief.

However, according to Jethanand Kohistani, the Chairman of the Pakistan Cotton Ginners Association (PCGA), ginners this year (2003-2004) lost 300 crores of rupees due to the fall in lint prices because the mills have bought 800,000 bales less this year compared with the previous season till the middle of March.

The activity in the domestic market may have been partly prompted by the feeling that China needs to buy more cotton before the end of the current season.

With the China factor being pressed on the cotton futures market regularly recent sessions have shown improvement in the prices in New York.

Therefore, China continues to remain the main imponderable on everybody's mind. Nevertheless, the value of the United States (US) dollar, the rising crude oil prices and competing crops like soyabean will also impact on new crop (2004-2005) cotton prices in the USA and elsewhere.

In actual transactions reported on Thursday, 500 bales of cotton from Shahpur Chakar in Sindh reportedly sold at Rs 2760 per mound (37.32 kgs) without the 5 percent Sales Tax while 800 bales from Ghotki and 1,300 bales each from Rohri and Yarolund in Upper Sindh (K-68) all are said to have been sold at Rs 3000 per mound each.

Without the 15 percent Sales Tax, 1,670 bales from Rahimyar Khan in the Punjab sold at Rs 2975 per mound; 200 bales in Khanewal sold at Rs 3,000 per mound; 1,400 bales from Rahimyar Khan also sold at Rs 3,050 per mound; while 4,700 bales from Multan reportedly sold between Rs 3,060 and Rs 3,100 per mound.

Courtesy Business Recorder