April 8, 2003	Tuesday	Safar 5, 1424

KARACHI, April 7: Physical activity on the cotton market failed to pick up on Monday as both spinners and mills kept to the sidelines awaiting further fall in prices.

Official spot rates were further lowered by Rs25 per maund to Rs2,550 from the weekend Rs2,575, the net decline over the week being Rs50 down from Rs2,600.

Stray inferior lots both from the central Sindh and southern Punjab ginneries changed hands as some of the needy mills were not inclined to await fresh decline in prices because of pressure on their stock positions.

Floor brokers said instead of rising because of a lower crop figure of 9.7m bales, far below the mills’ annual consumption needs, prices have took a downward course for no apparent bearish reason.

“Cheaper supplies from the foreign sources after the end of Iraq war may be one of the reasons behind a weak lint market”, they said. But some others claim the absence of the spinners from the ready market to contain short supply-related speculative run on prices may be the chief reason behind the falling volumes.

Whatever, may be the reason behind the slowdown in ready offtake during the post-crop figures sessions, one thing appears certain that spinners have taken positions not allow further rise in prices to keep their competitiveness on the world textile market.

Market sources said the unsold stock of about half a million bales of lint lying with the ginners is barely enough for about three weeks mill consumption, which could generate speculative run-up on the market but the absence of spinners has contained it.

But rather weaker links among the ginners who hold short unsold positions are worried over the absence of buyers from the market and some of them have already lowered their asking prices for the inferior lots.

However, reports coming in from the upper Sindh and southern Punjab cotton belts indicate that leading ginners holding modest stocks of fine lots are not willing to sell below Rs2,650 per maund, which in turn has slowed down the ready business.

It was perhaps due to this factor that some sort of standoff has overshadowed the physical trading for the last couple of sessions, notably after the release of final crop figures by the Pakistan Cotton Ginners Association (PCGA) last week.

Ready business was light totalling about 2,500 bales, mostly of inferior lots and sold between Rs2,500 to Rs2,550 depending on quality of lint in trade.