KARACHI,March 18: The cotton market depicted a steady tone amid moderate buying on Wednesday.

Partly encouraged by the bullish advice from the New York cotton futures and partly due to improved demand, the ginners showed resistance to further decline in prices.

On the other hand, needy spinners came forward to cover their forward sales at current low prices, which lent some strength to the weak market.

Official spot rate remained unchanged at Rs2,950 while prices on the ready counter stood steady at Rs3,000/3,100 for prime quality lint while lower grades fetched Rs2,500/2,850 depending on the quality of the lots.

About 10,000 bales changed hands in the ready market with most of the spinners still glued to the sidelines in expectation of further fall in prices. While even average good quality lint was available below Rs3,000, contamination-free lots could be had only above this level.

The spinners who wanted high quality lint to spin higher count yarn willingly paid the asking price. But the large majority was still sitting on the fence waiting for an improvement in the demand and price for yarn.

The nervous selling by weak ginners keen to dispose of their huge unsold stocks came to a sudden halt after the upturn in New York cotton prices. On March 16, both May and July contracts in the New York futures market were up by 0.36 and 0.14 cent per lb, which led to the resistance to the declining trend in the local market.

However, there is no denying that the ginners are worried over the evolving situation. They want to clear the heavy backlog of unsold stocks as early as possible to pre-empt any heavy loss.

The government is reported to have prepared a cotton policy for 2004-05 season, which would take full care of growers’ problems. It will address the two core issues: stagnated seasonal cotton production around 10 million bales against domestic consumption of 12.5 to 13 million bales and poor quality of our cotton which requires to be improved to international standards by implementing ‘Cotton Grading and Standardisation System’ at the ginning stage.

At present, the outlook for the cotton trade is quite gloomy. It is likely that the lint prices will not hold at the present rates but will taste still lower levels.

In this insipid atmosphere, the only cheerful note is temporary surge in US cotton prices. Brokers say that yarn fabric as well as cotton prices are all caught up in a suppressed syndrome, which has given rise to a weird kind of quietness in the market.

Only re-entry of China in various cotton markets could strengthen the price line, they added.

Ready business stood at 10,000 bales out of which 3,000 bales were from Sindh and the rest from Punjab.

Of Sindh cotton, 200 bales Tando Adam were sold at Rs2,500, 400 bales Nawabshah at Rs2,850, 800 bales Kandiaro at Rs2,750, 400 bales Tharoshah at Rs2,850, and 400 bales Hingorja at Rs2,650.

Of Punjab cotton, 4,000 bales Rajanpur changed hands at Rs3,000, 1,000 bales Khanpur at Rs3,100 and 200 bales Muridwala at Rs3,050.

The News International, Pakistan