July 6, 2002	Saturday	Rabi-us-Sani 24,1423

KARACHI, July 5L: Cotton market on Friday maintained a bullish trend as ginners further raised their asking prices on the perception that manoeuvring options of spinners may now have no relevance to the changed international price outlook.

Higher international prices, falling unsold stocks with the ginners and TCP’s refusal to sell below its benchmark price of Rs.2,000 per maund are some of the factors, which support the ginners higher price ideas.

This fact was also reinforced by the official rate committee of the Karachi Cotton Association (KCA) when it raised the official spot rates by a big margin of Rs.50 per maund just in one go.

After having purchased a big lot of about 2,000 bales a day earlier, at Rs.2,200 per maund, which seems to have gone in ginners way, spinners have already encouraged the ginners to entertain higher price ideas for the next couple of weeks, brokers said.

They said if the TCP has managed to sell even 20,000 bales out of its tender for 50,000 bales, the price situation may have remained in favour of spinners but its refusal not to entertain any bid below its benchmark price of Rs.2,000 per 40 kg has altogether changed the future market outlook.

Cotton analysts said the TCP should invite offers from the foreign buyers instead of local sales as the higher world prices around 46 cents per lb ensure a competitive rate even though local lint is sold at a discount being short and medium staple length.

Although leading spinners have built up fairly long positions at the lower levels, their weaker links may face some problems as the current price flare-up has eroded their competitive edge on the export markets, they added.

“I foresee a price war until the new crop arrives on the market,” one broker fear. “The local unsold stock around 0.250m bales are too meagre to meet the mill demand even for two weeks.”

All eyes are now focused on the crop, although it may not be that cheaper as being speculated by those spinners who hold short positions.

Official spot rates were revised upward by Rs.50 per maund after remaining dormant for the last about a week in line with those at which physical business was being done.

Most of the spinners stayed away as ginners raised their selling prices, and as a result, till late in the evening stray lots changed hands directly between the spinners and the ginners around Rs.2,200 per maund but inferior lots were sold below Rs.2,000 per maund.