May 18, 2002	Saturday	Rabi-ul-Awwal 5, 1423

KARACHI, May 17: Cotton market on Friday maintained a firm posture despite reports that the Trading Corporation of Pakistan (TCP) has sharply lowered its procurement prices apparently on the perception that fine lots may already have found their way into the spinners’ godowns.

Although the details of the new price structure of the TCP are not immediately available, the quality premiums are expected to be maintained, dealers said. The revised rate could well be the minimum at which the inferior lots or No.2 lint will be purchased.

According to market sources, the TCP has lowered its buying rates for the average quality of lint to Rs1,600 per maund from the previous Rs1,855.

“The cut in purchase prices by the TCP could have a negative impact on the spot rates in the coming sessions and may trigger panic selling from the ginners as well”, floor brokers say.

At the same time, the TCP has announced to further accelerate its buying operations from the ginners in a move to keep prices stable and economical for both the ginners and the spinners, they added.

“The TCP will buy each month about 50,000 bales from the willing ginners, the quantity being too small viewed in the backdrop of unsold stock of about a million bales”, some cotton analysts say adding “chances of price crash are there”.

Leading among them fear in the absence of strong demand from spinners or exporters, the TCP tally may not be able to forestall panic selling if tired ginners opt for it.

There is, however, a sliver lining also as spinner perceptions about the future outlook appear to be quite bullish for reasons best known to them but is well-reflected in their forward deals.

A spinner, for instance, made a forward deal for about 4,000 bales at Rs1,875, delivery after five months, which is considered fairly higher rate in the existing market conditions, they said.

Official spot rates remained pegged at the last close, while New York cotton futures fell 0.63 and 0.70 cents per lb for both the ruling July and distant October settlements at 35.48 and 37.88 cents per lb respectively.

Ready offtake comprised some big odd lot deals as under: 1,233 bales, Rahimyar Khan at Rs1,400, reflecting moping operations, 300 bales, Burewala at Rs1,6500 and 3,879 bales, Ahmedpur East at Rs1,875, delivery after five months.