May 7, 2002	Tuesday	Safar 23, 1423

KARACHI, May 6: Cotton market on Monday reopened on an easy note as higher unsold stocks of over a million bales lying with the ginners kept spinners on sidelines for most of the time.

“The larger unsold stocks ensure comfortable supplies for the months to come,” one leading spinner says, adding “there is no need to rush for them as the TCP and the private sector exporters could not grab them just in one go.”

After having purchased about 9m bales from the local market in addition to an identical amount of imported stuff in their godowns, spinners are entertaining bearish price ideas in the weeks to come and that is perhaps why they are working under a unified strategy, some brokers claim.

According to one estimate spinners are already close to their annual consumption needs of slightly above the 10m bales figure and may not be that active buyers but at the dips.

But worries among the ginners are mounting as a huge amount of about Rs12bn is tied to the unsold stocks and they have to meet their bank demands and clear growers outstanding dues.

“Whether or not ginners, notably weakers among them will resort to panic selling in the coming weeks and will largely depend on the procurement drive of the TCP and its capacity to absorb a good part of the unsold stock,” some dealers say.

But future outlook appears to be a bit sluggish as larger imports of lint (1m bales) by the spinners has all together changed the market outlook. Higher production figure has further accentuated the price situation.

According to arrival figures released by the Pakistan Cotton Ginners Association (PCGA) for the fortnight ended April 30, the total cotton rose to 10.291m bales as compared to last year’s 10.187m bales, showing an increase of 1.02 per cent.

Out of the total, spinners have purchased 8.950m bales, slightly below the last year’s comparable figure of 8.950m bales, the TCP 0.239m and the private sector exporters 97,278 bales, leaving an unsold stock of 1.017m bales as against previous seasons’s 0.644m bales.

However, there was no change in the official spot rates but some of the deals reported in the ready section were well below them.

Ready offtake was modest as till late in the evening 3,000 bales changed hands as under: 200 bales of Tharo Shah at Rs1,600 on credit, 1,600 bales, Ahmedpur East at Rs1,600 and 1,200 bales of Bahawalpur at Rs1,625.