March 26, 2003	Wednesday	Muharram 22, 1424

KARACHI, March 25: Active trading was witnessed on the cotton market on Tuesday as spinners resumed their covering operations after ginners refused to lower their asking prices.

For the last couple of sessions, leading spinners and mills remained conspicuous by their absence apparently in a tactical move to unnerve ginners, but no one among them was in an obliging mood and held on to their positions, brokers said.

As fears of a short crop continued to haunt them, spinners decided to re-enter the market and covered positions at the ginners’ options as they have to pay more for fine lots as compared to their previous targeted price.

With the final crop figures just a couple of days away, spinners were not inclined to take further risk and lifted all the lots offered by the ginners at above Rs2,600 per maund, the highest rate at which a big lot of about 4,000 bales changed hands was Rs2,700.

Market sources said reports originating from the ancillary sector indicate that spinners are passing on the negative impact of the higher prices to the former in the form of expensive cotton yarn.

According to them, leading spinners had sought an identical increase in yarn prices from their foreign trading partners to absorb the negative impact of cost-push caused by the expensive lint, but in most of the cases there was no positive response.

“We are worried over the developing situation on the textile export front as foreign buyers are not opening letters of credit for the next quarter,” one spinner said. “They tell us await until the Gulf war ends.”

Some others complained that unsold inventories are rising in the absence of strong local demand and a near-standoff on the export front the chief reason being the Iraq war and fears of interruption in shipments.

But, on the other hand private sector cotton exporters appear to be a bit active as they sold another 1,932 bales on March 22 to Bangladesh, Taiwan and Indonesia.

Official rates remained pegged at the last close, but most of the deals in the ready section were done well above them.

Ready business showed a modest expansion at 10,000 bales, the following being some of the notable deals:

SINDH TYPE: 400 bales, Tharoshah at Rs2,600; 1,000 bales, Hingorja at Rs2,555; 200 bales, Setharaja at Rs2,575; and 1,000 bales, upper Sindh at Rs2,650 to Rs2,675.

PUNJAB VARIETY: 400 bales, Rahimyar Khan at Rs2,650; 2,000 bales, Bahawalpur at Rs2,650, 3,600 bales at Rs2,700; and 600 bales, Ahmedpur East at Rs2,650.