January 30, 2003	Thursday	Ziqa’ad 26,1423

KARACHI, Jan 29: Cotton prices on Wednesday stayed firm amid moderately active trading as spinners and mills continued to cover their forward positions against foreign sales of cotton yarn.

However, despite entry of the private sector exporters in a big way as leading among them are said to be far behind the target of their forward sales, spinners managed to keep prices within their export parity levels after striking a judicious balance between the supply and the demand, dealers said.

Leading spinners are, however, fully aware of the future supply and demand factors as some of them are already indulging in forward deals. A prominent spinner has bought 8,000 bales at Rs2,390 on three-month credit, indicating the future price perceptions, broker Naseem Usman said adding the previous highest forward rate was Rs2,350 per maund.

According to market sources exporters have already made forward deals for about 0.2m bales of lint at attractive prices but need another 50,000 bales to meet their shipment deadlines.

A leading exporter has purchased 1,000 bales from a Punjab ginnery at Rs2,225, which means export prices are fairly attractive.

But spinners seem to be a little worried over the strong presence of exporters in the market as they have curtailed their daily intake to have a check on any speculative rise in prices, dealers said.

During the mid-season cotton trading daily mill offtake averages around 40,000 bales, which now has declined to about 15,000 to 20,000 bales, never allowing ginners to raise their asking prices, they added.

Ginners on the other hand are worried as long unsold positions of about 2m bales mean huge amount of 20bn is tied to them, creating payment problems for them. Ginners owe large amounts to the growers and are clearing in part outstanding dues of growers after borrowing from the banks or against their overdraft limits, brokers said.

Meanwhile, reports coming from the foreign markets indicate that cotton yarn prices have shown a modest improvement during the last couple of weeks owing to higher world rates of cotton and fears of global shortage of the commodity.

It was perhaps in this background that official spot rates remained pegged at the overnight levels but New York cotton futures suffered modest decline ranging from 0.19 to 0.22 cents for both the May and March contracts at 54.41 and 50.36 cents per lb respectively.

Ready offtake was relatively better as till late in the evening about 20,000 bales changed hands after several lean sessions. The following are some of the notable deals:

SINDH VARIETY: 3,000 bales, upper Sindh at Rs2,250, 500 bales, Sanghar at Rs2,055 and 200 bales at Rs1,925.

PUNJAB TYPE: 4,000 bales, Rahimyar Khan at Rs2,285 to Rs2,300, 8,000 bales, Hasilpur at Rs2,390 on three-month credit and 1,000 bales, Vehari at Rs2,225 purchased by an exporter.