March 22, 2003	Saturday	Muharram 18, 1424

KARACHI, March 21: Physical activity on the cotton market on Friday remained at a standstill as spinners and mills withdrew to the sidelines after ginners further raised their asking prices well above their export parity levels.

Thursday’s selective deals around Rs2,700 per maund have encouraged ginners to further raise their asking prices beyond this level, but spinners were not inclined to toe this line and remained conspicuous by their absence throughout the session, dealers said.

As a result, no fresh deal was officially reported by the leading brokerage houses, although some claim leading spinners indulged in fresh speculative buying to cover their forward positions against foreign sales of cotton yarn.

Some others said stray business was also reported in inferior lots as ginners obliged the needy mills to keep the wheels of industry moving.

“I foresee difficult period ahead for the textile industry,” predicts a cotton analyst, adding “if the Iraq war drags on for months its negative impact on the local industry may be beyond absorption.”

What seems to have made things more difficult is the fear of choking of foreign supply lines owing to shipping problems and further increase in prices, they added.

Floor brokers also hold the same view and predict a possible standoff in the cotton trade as spinners may not be in a position to balance their export priorities if prices further rose from the current levels.

“The supply situation seems to have been aggravated by the fears of a short crop as well as expensive foreign lint,” they said, adding “leading spinners are awaiting the arrival figures of phutti for the month of March.”

If the final crop figure is in line with the private surveys conducted by the spinners and some private agencies, below or around 10 million bales, the possibility of fresh price flare-up is not ruled out by the analysts.

On the export front, some private sector exporters have sold 2,340 bales of lint cotton to Bangladesh importers, the total foreign sales so far being 0.155m bales.

Official spot rates were further raised by Rs35 per maund to Rs2,700 per maund, while in the ready section ginners were not inclined to sell below Rs2,750 per maund.

New York cotton futures on the other hand suffered modest fall of 0.29 cents per lb for both the ruling May and the distant July settlements at 58.80 and 59.51 cents per lb, respectively.

The decline was attributed to lack of support from the foreign buyers because of possible shipment problems in the backdrop of Gulf war.