KARACHI, (March 20 2004): Cotton market on Friday resisted fresh decline as ginners again raised their asking prices followed by reports of bullish trend on the world trading centres.

Ready offtake, therefore, fell to a low ebb as spinners and mills were not inclined to make fresh commitments at the rising prices because of their export parity constraints.

Owing to cricket match between the Pakistan and Indian teams in Peshawar most of the leading brokers remained busy with proceedings in the match and did not entertain fresh buying offers from the needy spinners, market sources said.

However, fresh price flare-up in the New York cotton futures for the second day in a row on strong speculative buying worried spinners and mills who fear identical increase in local prices, dealers said.

New York cotton futures rose by 1.65 and 1.164 cents per lb for both the ruling May and forward July settlements at 67.75 and 69.11 cents per lb respectively.

"Steep rise to well over 69 cents per lb in July contracts indicates that future price outlook may be terribly bullish," fears a leading spinner "whether or not the local ginners follow them could upset our export projections."

He said right now import would be more expensive and if the current price flare-up was extended, there would be many problems for them on the export front, he added. Spinners have been hoping a modest decline in lint prices after the reports of higher arrival figures but instead ginners have raised their asking prices.

According to official arrival figures, released by the Pakistan Cotton Ginners Association (PCGA), the total showed a modest rise at 9.673m bales, out of which spinners have purchased 8m bales up to March 15 and still have to go a long way to cover up their annual demand of 12m bales plus.

The lower unsold stocks of about 1.5m bales lying with the ginners are too small to meet the mill demand and the supply gaps has to be bridged through imports.

It was perhaps in this background that official spot rates were raised by Rs25 per maund at Rs2,975 as compared to Rs2,950 a day earlier. Some lots did change hands in the ready section late in the evening, reports coming from the southern Punjab ginneries said. About 4,000 bales business was reported in fine types between Rs2,950 to Rs3,050.



The following are Friday's new crop Karachi Cotton Association (KCA) official spot rates for local dealings in Pak rupees for base grade 3 staple length 1-1/32" micronair value between 3.8 to 4.9 NCL.
Rate for Exgin price Ex-gin price
including Sales Tax Upcountry Expenses Spot rate ex-Karachi
including Sales Tax @ 15%
37.32 kgs 2,975 3,421.25 50 3,471.25
Equivalent
40 kgs 3,188 3,666.20 50 3,716.20.

The DAWN