February 7, 2003	Friday	Zul Hijjah 5,1423

KARACHI, Feb 6: Cotton prices on Thursday rose further amid an actively traded session as fears of a short crop continued to inspire panic mill-buying but ginners appear to be reluctant sellers even at the peak levels.

Some of the fine lots were traded as higher as Rs2,400 per maund after leading spinners went all out to grab the floating stock well above their export parity levels.

“The market witnessed a virtual run on the lint followed by reports that the total crop may not hit the level of 9.7m bales,” brokers said. “Spinners are not mad, they must have a fair idea of the crop before raising their buying offers.”

Big-lot business was witnessed for the second session as some of the ginners sold in part their long positions to balance their inventories.

Steep increase in phutti prices to Rs1,225 per 40 kg was behind the current price flare-up, market sources said adding although bulk of it has already arrived in the ginneries. “But ginners are not inclined to purchase phutti at the new peak levels as after adding conversion charges, the lint will cost at Rs2,700 per maund,” says a leading broker commenting on the current price flare-up.

Who will buy the leftover stocks of phutti is not clear as ginners are not in an accommodating mood at least until that time lint prices show a comparative increase, he adds.

The cotton market is passing through a crisis of supply and demand, which can push spinners in a disadvantageous position on the export front. Most of them had made forward export deals for the quarter ending March 31, at much lower rates when the lint was available below Rs2,200 per maund, he said.

Market sources said panic mill-buying also reflects that the spinners and mills are also well aware of the developing situation but panic with which they are operating could further accentuate the situation.

Import prospects at competitive rates are also remote as world prices are much higher than the local ones. New York cotton futures on Wednesday were quoted at 51.85 and 55.90 cents per lb for both the ruling March and the distant May settlements respectively.

Official spot rates were upped by another Rs15 per maund at Rs2,250 per maund, although in ready section some of the deals were finalized around Rs2,400 per maund depending on quality.

Ready offtake was on the higher side as mills and spinners were not inclined to sit on the sidelines and purchased all the lots irrespective of price tag. The following being some of the notable deals:

SINDH VARIETY: 5,000 bales, Salehpat Rs2,400, 3,000 bales, Rohri at Rs2,400, 1,000 bales, Dadu at 2,225, 200 bales, Dharki at 2,325, 1,000 bales, Sanghar at 2,150 and 300 bales, at 2,090.

PUNJAB TYPE: 1,800 bales, Khanpur at Rs2,350 and 670 bales, Duyniapur at Rs2,250.