September 5, 2002	Thursday	Jamadi-us-Saani26,1423

KARACHI, Sept 4: Cotton prices on Wednesday fell below the Rs2,000 per maund level as ginners were not inclined to hold on to their unsold positions owing to steady rise in arrivals of phutti.

While most of the deals in physical trading were finalized between Rs1,950 to Rs1,975, a ginner from the lower Sindh cotton belt sold 200 bales at Rs1,900 for delivery on Sept 20.

“A forward deal at Rs1,900 per maund reflects that near-term price outlook appears to be a bit bearish as ginners are not inclined to hold long positions even for the near-term”, brokers said and “it could lead to panic selling in the coming weeks”.

For the second session in a row bulk of the demand came from the Punjab spinners as leading among them are building up long positions at the falling prices despite problems on cotton yarn exports on the Far Eastern markets.

Most floor brokers predict prices could ease further from the current levels irrespective of the higher crop ideas as mill demand may not pick up to absorb bulk of the stocks lying in the lower Sindh ginneries.

“The supply situation could further improve in the coming weeks as more ginneries in the central Punjab cotton belt have resumed operations and that could well mean oversupply as compared to ready demand and guarded mill buying”, one broker says.

Already phutti prices had eased from the seasonal highs of Rs1,000 per 40 kg to Rs870-Rs875 and reports coming from the cotton belt indicate some of the growers are making panic selling fearing further decline in prices.

“I fear official intervention during the next couple of weeks to ensure a fair price to the growers if it falls below the minimum support rate of Rs800 per 40 kg”, one broker says.

Official spot rates, however, were quoted unchanged for the second day and may be lowered by tomorrow to match the prices at which physical business is being done.

New York cotton futures on the other hand fell further by 0.86 and 0.73 cents per lb for both the ruling October and the distant December settlements at 43.80 and 46.74 cents per lb respectively.

Ready offtake was modest totalling 4,000 bales, all from the Sindh ginneries, the following being some of the important deals: 200 bales, Sultanabad at Rs1,900 for delivery on Sept 20, 200 bales at Rs1,950, 400 bales, Shahdadpur at Rs2,000, 400 bales, at Rs1,975, 400 bales, Sanghar at Rs1,975, 400 bales, at Rs1,950, 600 bales, Mirpurkhas at Rs1,950, 100 bales, Khipro at Rs1,960 and 400 bales, Tando Adam at Rs2,000.

About 1,000 bales from the Punjab ginneries changed hands between Rs1,950 to Rs2,075 depending on quality of lint.