June 23, 2002	Sunday	Rabi-us-Sani 11, 1423

KARACHI, June 22: Trading activity on the cotton market on Saturday slightly slowed down as spinners were reluctant to chase prices further higher keeping in view their export parity levels for the finished products.

Though a bit late, the reports of crop shortages in the major cotton producing countries, including China and the US, have altogether changed the local cotton outlook at least until the arrival of the new crop.

World cotton prices have climbed to new season peak driven by fears of global shortages of the silver fibre, cotton analysts said, adding news reached Pakistan when the tillers were preparing for the cotton crop amid hopes that new year could ensure a fair return on their investment.

“It could well be beginning of bullish cycle for the world textiles,” hope leading spinners, adding “we are already tailoring our new year export strategy in line with the world supply and demand factors.”

According to spinners, textile industry the world over mostly operates under five-year cycles known as ‘recessionary and bullish’ and both follow each other in a traditional manner. However, sometime the duration of the each is extended beyond the natural cycle period because of some unusual events, including higher or lower world production figures.

Incidentally, both growers and the ginners may not be in a position to benefit from the imminent price flare-up as they had already exhausted their long unsold stocks at much lower rates, says a leading broker.

But it is right time for the spinners to benefit from the rising world prices on the strength of their strong stock positions built-up at much lower rates earlier in the season when prices had dropped to seasonal lows, brokers said.

Some of the leading private sector exporters who purchased lint earlier well above their export commitments in anticipation of further rise in prices at the fag-end of the season are also expected to gain from the recent price flare-up on the world markets.

The New York cotton futures shed in part the overnight limit-gains for the new crop October settlement, off 0.37 cents per lb at 45.10 cents per lb, while the ruling July contract was quoted further higher by 0.24 cents per lb at 43.09 cents.

The local official spot rates on the other hand remained pegged at the overnight levels, although in the ready section some of the deals were done above them.

Meanwhile, exporters have registered export contracts for another 1,238 bales, with the Export Promotion Bureau (EPB) on June 21, sold to Taiwan and Philippines. The total foreign sales rose to 0.182m bales.

Ready offtake was modest as price ideas of both sellers and buyers were poles apart. However, stray lots, including 300 bales from Chichawatni changed hands at Rs1,620 per maund.