By Our Staff Reporter
KARACHI, March 10: Quieter conditions prevailed on the cotton market on Tuesday as spinners were not inclined to make fresh commitments despite the fact that some of the ginners have lowered their asking prices.

Fresh limit-fall in the New York cotton futures on selling followed by reports that China is expected to harvest a higher crop during the current season allaying earlier fears of a sharp decline in its production. According to latest figures, its total crop will show an increase of 0.9 per cent over the previous year's figure.

Rolling of positions from the matured March settlement, which was rung off the board on March 8, to the ruling May delivery also triggered a lot of selling in both the contracts including the newcomer July in sympathy.

Both the ruling May and the newcomer July contracts were marked down by limit-fall at 67.01 and 68.40 cents, off 2.47 and 2.30 cents per lb respectively.

Local spinners and mills kept to the sidelines anticipating an identical fall in local prices and to cover positions at the dips, but ginners held on to their positions.

A battle of wits appears to be at its peak as spinners are seeking further decline in prices, while ginners are not inclined to oblige as most of them had purchased phutti at much higher rates, dealers said.

Spinners claim export prices of cotton yarn are much lower than the prevailing rates of lint cotton and it is pretty difficult for "us to maintain export parity levels", they said.

"While ginners are caught in the cobweb international price manoeuvring and so are spinners, while the grower is sitting pretty comfortable after having got best-ever price for its produce", market source said.

The current standoff in the cotton trade is expected to continue for some more weeks as spinners and mills are not inclined to make bigger commitments at the prevailing prices because of export parity reasons.

Some of the ginners who still hold long unsold positions are a bit worried over the developing situation as huge amount of bank money is tied to them. According to unofficial sources ginners still hold an unsold stock of more than 2m bales, worth Rs25bn and in the absence of strong mill or exporter demand, some of them may opt for panic selling in the weeks to come.

"The market is a victim of slack mill demand rather than another negative background news and until spinners resume their normal buying operations the current standoff will continue", market sources said.

There was no change in the official spot rates, which were firmly held at the last levels in the absence of active ready business. Business on the ready counters remained at a low ebb as only about 3,000 bales changed hands, the following being some of the notable deals: 2,000 bales, Shorkot at Rs3,100 and 200 bales, Sanghar at Rs2,565.



The following are Tuesday'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 3,050 3,507.50 50 3,557.50
Equivalent
40 kgs 3,3269 3,759.35 50 3,809.35.

The DAWN