By our correspondent
KARACHI (March 09 2004): The cotton market continued to be subdued on Saturday, due to poor buying interest.

This was the extension of the slide which had made itself manifest for the last five weeks.

During the week, the lint prices’ were further down by Rs50. The gloom has reportedly descended on the textile industry following the imposition of anti-dumping duty by the European Union on Pakistani bed linen.

The market reopened on Wednesday after two-day holiday on account of Ashura on a negative note because of the steep decline of 4 cents per lb. in the rate of New York cotton futures.

The local spinners and textile mills withdrew to the sidelines in anticipation of a sympathetic fall in domestic lint prices. Thus complete lull prevailed in the market. The KCA reduced the official price by Rs50 to Rs3050.

High-grade lint was being traded at Rs3100/3125 in Sindh and Punjab while the inferior quality cotton fetched Rs2500/2600. The Phutti price stood at Rs900/1300 per 40 kg.

The Market sources attributed the slide in local prices to the decline in New York cotton prices.

An APTMA spokesman told the secretary, Karachi Cotton Brokers Association, Naseem Usman, that the textile industry was already in the throes of a grave crisis due to persistent fall in yarn prices.

Now the imposition of antidumping duty on bed linen has dealt a mortal blow to the industry.

This will badly hit textile exports making the achievement of export target rather difficult.

The entire textile market has sunk into depression due to imposition of antidumping duty on bed linen limiting business activity in the cotton market.

The business volume has shrunk to the bare minimum. The fall in yarn prices and demand has further aggravated the situation.

The Pakistan Cotton Ginners has not released the cotton arrival figures for the second fortnight of February due to Muharram holidays.

An important meeting regarding resumption of hedge trading in cotton has been convened in Rahimyar Khan on March 13.

It is somewhat strange that while the domestic mills still need a lot of cotton, the normal demand for lint has suddenly dropped, if not almost vanished for the past several weeks.

Of course the increased use of polyester fibres and spinning of much higher counts of yarn by several mills has also dampened some appetite of the spinners to accumulate larger stocks of cotton.

In other developments, some mills are reported to be accumulating yarn due to lack of sales.

On the other hand, now the arrival of current crop seed cotton in many parts of the cotton belt are reported to be waning. The situation has led to a reduction in enquiry for cotton following the reportedly depressed cotton market.

Thus the turnover in the cotton market has been low during the whole week.

Traders said that lower grades of leftover cotton might find buyers abroad.

Regarding the higher grades of lint carrying micronaire values in the range of 4.5 or 4.6 it is still being tightly held in the hands of some leading ginners who do not want to sell below Rs3100or Rs3200 per maund without the sales tax.

Although some of the ginners are holding on to their asking prices for their premium grade cotton, generally speaking the lint prices are exhibiting a weak disposition with little or no turnover.

The loss of about 4 cents a pound in New York cotton futures prices for the current month has also cast some gloom over the domestic cotton prices.

The last few weeks have seen cotton prices jump up and down in a very volatile market. The rebound of the US dollar was also reportedly responsible for the slide in cotton prices.

Thus the whole week, cotton prices in the local market were more or less placid with some erosion reported in certain classes of cotton.

The price idea from Mirpurkhas in Sindh reportedly ranged between Rs2500 and Rs2550 per maund while Shahdadpur, Sanghar and Tando Adam cotton were being quoted in the range of RS 2600/2650 per maund.

In Nawabshah district , cotton was being offered at Rs2800/2850 while price idea from Khanpur district stood at Rs2850/2900 per maund. In upper Sindh, K68 was being quoted at Rs3050/3100 per maund according to its quality.

The notable feature of the week has been re-entry of private sector exporters into the market to lift some low mic lots from central Sindh ginners against their forward sales.

It shows interest of foreign buyers in low priced inferior quality lint.

Meanwhile, the local spinners have not yet been able to decide whether to go for import of foreign cotton or wait for further decline.

They will miss the opportunity in case the New York cotton prices bounce back. There is general belief that the slide in world cotton prices will persist because of supplies outstripping demand.

While spinners continue to bide time in expectation of a sympathetic fall in domestic cotton prices, the ginners maintain that they cannot reduce the price below Rs3000 as they have paid Rs1300 per 40 kg for phutti, which has made processing of seed cotton very expensive.

It may be recalled that at the fag end of 2003, the phutti price had gone up to Rs1750 per 40kg on reports of extensive damage to the standing crop. It is mainly the low mic cotton that is being offered at much concessional rate. Some weak ginners are also keen to dispose of their stocks before the arrival of the new crop.

The official spot rate was marked down by Rs25 at Rs3050. Ready business stood at 6000 bales out of which 4000 bales were from Sindh and the rest from Punjab.

Of Sindh cotton, 2350 bales Jhole were sold at Rs2590, 1000 bales Shahdadpur at Rs2600 and 500 bales Shahpurchaker at Rs2700.

Of Punjab cotton, 245 bales Rahimyar Khan changed hands at Rs3150, 200 bales Rahimyar Khan at Rs3125 and 1600 bales Liaquatpur at Rs3100.

The News International, Pakistan