KARACHI, Jan 11: Cotton market finished the weekend session on a steady note as both spinners and mills continued to cover their positions against forward sales of cotton yarn to foreign buyers.

After early week dullness caused by the higher than market expectations arrival of phutti into the ginneries and hopes of decline in prices, spinners were back in the market and have resumed normal covering operations, dealers said.

The phenomenon of sharp increase of a million bales in the arrivals of phutti seems to have lost its relevance followed by reports that growers have virtually dumped the commodity fearing fall in prices.

“What seems to have lured spinners and mills back into the arena again was the rumour that the arrival figures could witness an identical fall during the first fortnight of the new year ending Jan 15, 2003,” they added.

There is a wide gap between the production estimates of both the spinners and the ginners. The former put the total around 9.7m bales, while the latter say the total may surpass the 10m bales figure with a margin of half a million bales or so.

But resumption of normal buying by the spinners and the mills reflects both have, through their own crop monitoring network, a fair idea of the total crop and are trying to cover their positions before a possible price flare-up, market sources said.

“The prevailing prices below Rs.2,200 per maund suit both the ginner and the spinner,” they said and “this fact is well-reflected in larger daily mill intake.”

Meanwhile, reports coming from the cotton yarn market showed a modest pick up in demand from the local end-product users as well as from the overseas buyers at a competitive rates.

The increase in import quota by the European Commission despite anti-dumping charges and higher world prices has made local yarn more attractive for the foreign buyers. The 16 per cent increase in textiles during the first half of the current year was due to competitive prices.

It was perhaps in this background that official spot rates did not show any change despite modest fall in phutti prices. Inferior quality of phutti is being sold between Rs.800 to 850, while fine quality around Rs.900 to 1,000 per 40 kg.

New York cotton futures on the other hand recovered from the previous lows and were quoted higher by 0.34 and 0.39 cents per lb at 51.40 and 55.15 cents per lb for both the ruling March and the distant May contracts.

Ready offtake was active and till late in the evening about 10,000 bales from the Sindh ginneries changed hands as under: 1,800 bales, K-68 Sawgin, Dharki, Gothki at Rs.2,150, 2,600 bales, Mirpur Mathelo at 2,165 to 2,175, 1,000 bales Moro at 2,080, 300 bales, Sanghar at 2,050, 300 bales, at 2,075, 600 bales, Naushero Feroz at 2,075, 800 bales, Dadu at 2,125 and 400 bales, each Sarari and Nawabshah at 2,100.