May 9, 2003	Friday	Rabi-ul-Awwal 6, 1424

KARACHI, May 8: Cotton market on Thursday resisted fresh decline as ginners were not inclined to follow the bearish trend in world trading centres and held on firmly to their unsold positions.

Physical business, however, remained light as spinners lowered their bid rates in line with the falling world prices but ginners did not lower their asking prices, notably for the fine lots.

“The fall below the 50 cent per lb level of New York cotton futures has sent shock waves among the surplus countries”, brokers said adding “most of them were eying higher prices followed by reports of higher consumption and lower world production”.

But spinners think the current SARS-related panic in the world cotton trading centres may spill over to the local market in due course and in that case it will be very difficult for the ginners to hold the price-line.

The current standoff in the daily physical business was said to be the outcome of the perceptions of ginners and spinners and both may be right in their own way.

But ginners appear to have an edge over the spinners as unsold stock of below 0.3m bales may not prove a financial burden on them, brokers said.

Spinners on the other hand needing another half a million bales to cover their annual consumption needs may remain at the receiving end irrespective of continued fall in the world prices during the next couple of week, they added.

Thus the prevailing cotton situation could be harmful for the spinners as piling of yarn stocks meant for the Far Eastern markets because of SARS-related interruption in physical shipments to these countries could cause pressure on their liquidity positions.

New York cotton futures on Wednesday suffered fresh sharp setback of 1.19 and 1.15 cents per lb for both the maturing May and the distant July settlements at 49.01 and 50.61 cents per lb respectively.

Local official spot rates on the other hand resisted fresh fall and were quoted unchanged at the overnight levels.

Ready offtake was modest totalling about 1,500 bales, the following being some of the notable deals: 200 bales, Sanghar (seedstuff) at Rs.2,500 per maund; 324 bales, Kandiaro at RS 2,450; 300 bales, Dharki at Rs 2,550 and 300 bales, Mirpur Mathelo also at the same rate.