April 2, 2003	Wednesday	Muharram 29, 1424

KARACHI, April 1: The cotton market on Tuesday maintained firm trend as ginners were not inclined to lower their asking price in the backdrop of reports of a short crop.

But the price war between the spinners and the ginners is claimed to be at its peak as both are not inclined to loosen their grip on the market at least for the near-term, dealers said.

While the former are not inclined to test the price level of Rs2,700 per maund, the latter is endeavouring to breach through it, eyeing the next chart point of Rs2,800.

The ready offtake appears to be the chief casualty as both have taken rigid positions basing their assessment on the supply and demand factors during the next two months.

“The steep rise in the New York cotton futures after lacklustre trading over the last couple of sessions may change the entire world price outlook during the coming weeks,” fears a leading broker and added to it are “fears about the outcome of Iraq war and its impact on the world economies.”

Most spinners also share this views on the future price outlook if the Gulf war drags on for weeks, but one thing appears certain that the imports are expected to become more expensive following the levy of war risk surcharge and increase in freight rates, he said.

But what worries spinners and mills is that fresh import orders for textiles are far below the pre-war inflow as foreign buyers are reluctant to open fresh letter of credit fearing interruptions in supplies owing to shipping problems, he adds.

The final arrival figures due during the next couple of sessions are expected to clear the dust being raised on the price front. One thing, however, appears certain that it may not be possible to contain the price flare-up during the post-figure sessions.

After having fallen during the last couple of sessions, New York cotton futures showed smart recovery and were quoted higher by 1.17 and 1.30 cents per lb at 57.71 and 58.93 cents per lb for both the ruling May and the distant contracts, respectively.

Dealers said the forward contract was racing towards its next chart points of 60 cents and could attain it within the current trading week.

Official spot rates on the other hand did not show any change and were firmly held at the previous levels.

Ready business remained slow as price ideas of sellers and buyers failed to find a meeting ground. Brokers reported stray deals in the southern Punjab variety at around Rs2,650 per maund.