June 26, 2002	Wednesday	Rabi-us-Sani 14, 1423

KARACHI, June 25: Physical activity on the cotton market remained slow on Tuesday as ginners further raised their asking prices for the ready stuff in line with the international rates.

Stray lots, however, did change hands as spinners holding short positions were not inclined take a breather, hoping decline in prices and made fresh commitments.

But their purchases were confined to inferior lots offered by the ginners between Rs1,500 and Rs1,700 per maund and beyond this level they refused to buy.

Floor brokers said the recent price flare-up, both on the local and the foreign markets, had made it pretty for them to cover their forward positions pretty difficult because of parity reasons.

Most of them have made forward deals with their foreign trading partners when the New York cotton futures were ruling below the 40 cent per lb level and sudden rise above 40 cents has created procurement problems for them.

“Local prices during the last couple of sessions have risen by Rs200 to Rs250 per maund, well above the rates at which foreign sales were made,” some brokers claim.

There may not be fears of default on the part of some exporters as the dates of physical shipments could be extended to a mutually-agreed new date. In some cases export agreements also stipulate the extension of shipments to the new crop if there is a sudden price flare-up on the local market for various reasons, including crop shortage.

But those exporters who have covered their forward positions soon after the signing of the export deal are least worried as their physical shipment deadlines are not disturbed, they added.

Leading spinners on the other hand are said to be happy over the recent price flare-up as it has enhanced the selling rates of textiles and cotton yarn on the world markets, they said, adding “their stock position is pretty comfortable as they have imported over a million bales from various countries at much lower rates.”

Ready offtake was light as price ideas of buyers and sellers failed to find a meeting ground. As a result, about 2,000 bales from different southern Punjab ginneries changed hands between Rs1,750 to Rs1,900 per maund depending on quality, dealers said.