March 19, 2003	Wednesday	Muharram 15, 1424

KARACHI, March 18: Cotton prices on Tuesday rose further as fears of a possible pressure on ready supplies kept spinners and mills at their toes all the time, but unlike the previous sessions ginners were active sellers notably above Rs2,600 per maund.

Incidentally, fears of Iraq war are not so far considered a relevant bullish factor as it could choke the foreign supplies after the US attack on Iraq. Moreover, foreign lint may be more expensive owing to additional freight charges and war risk surcharge, dealers said.

Some of the private sector exporters also turned active sellers fearing shipment problems after the US attack on Iraq and sold about 2,400 bales to spinners at Rs2,465 and Rs2,600 depending on the quality.

Floor brokers said leading ginners, mostly those who were not worried about the bank demands to readjust their outstanding dues against overdraft limits, were holding on to their positions eyeing the price level of Rs2,700 per maund without 15 per cent sales tax.

There is a consensus among the brokerage that prices could touch the high mark of Rs2,700 per maund during the next couple of weeks as supplies may not be enough to meet the annual demand of the textile sector.

However, excepting some forward deals, fine lots are generally traded at Rs2,600 per maund, while inferior ones are sold between Rs2,500 and Rs2,550.

“There are no two opinions about the size of the crop,” spinners say, adding “it is well below the annual consumption needs of the textile sector and the extent of the shortfall is hard to assess at this stage.”

The crucial question is how to make up the shortfall as world prices are too high to opt for at this stage and the rates of end-products have not shown sympathetic rise on the world markets, they say.

Leading spinners are, therefore, not inclined to sit on the sidelines and purchased all the lots, including the big ones at around Rs2,625 per maund or slightly below this rate.

Despite slight reaction in the forward July contract, the New York cotton futures stayed firm above the chart point of 60 cents. The ruling May settlement was quoted unchanged at 60.02 cents per lb, while the distant July eased by 0.21 cents per lb at 60.48 cents per lb on stray trade selling.

Local official spot rates, which had been static for the last couple of sessions, were also up by Rs15 at Rs2,550 per maund.

Ready offtake was brisk totalling about 25,000 bales as under:

SINDH VARIETY: 5,200 bales from upper Sindh at Rs2,575 to Rs2,600; and 2,700 bales of Nawabshah at Rs2,475.

PUNJAB TYPE: 4,000 bales from Rahimyar Khan at Rs2,575 to Rs2,600; 2,000 bales, Khanpur at Rs2,60; 400 bales, Vehari at Rs2,610; 200 bales, Ahmedpur East at Rs2,625; 500 bales, Yazman at Rs2,625 and 200 bales at Rs2,500; 200 bales, Lodhran at Rs2,600; and 1,000 bales from Shah Jamal at Rs2,575.