May 13, 2003	Tuesday	Rabi-ul-Awwal 10, 1424

KARACHI, May 12: Trading on the cotton market on Monday resumed on a dull note as both the sellers and the buyers adhered to the sidelines awaiting some fresh developments on the export front.

Floor brokers said there was, however, no panic among the spinners who were not inclined to go beyond their export parity levels in the backdrop of higher inventories of the unsold yarn.

“Yarn exports to some Far Eastern destinations are virtually held up because of Sars-related negative impact on the foreign trade,” they said, adding and until exports get normal, ready business may remain at a low ebb.

“Huge amounts of liquid cash are tied to unsold stocks of cotton yarn,” another spinner claims. “It has limited our daily buying options while ginners are not in a mood to indulge in forward deals.”

“The general thinking is that unsold lint stock of 0.4m bales still lying with the ginners may be on the lower side of the mill needs. The current softening in the world cotton rates has opened an alternate channel for us,” he added.

But the interesting feature of the trading is that ginners are steadily holding on to their unsold positions apparently on the perception that the figure does not pose any financial threat to their liquidity and could hold on to it for the next couple of weeks.

As both, the sellers and the buyers, have taken rigid positions according to their respective supply and demand perceptions, the chief victim is the ready business.

Some of the spinners, mostly operating on weekly basis are, however, worried over the current standoff as they are unable to meet their demand from the local market in the absence of sellers.

Unconfirmed reports say some of the spinners having surplus stocks beyond their annual consumption needs are selling in part to the needy mills around the prevailing rates.

Meanwhile, reports coming from the cotton belt indicate that sowing of the new crop has already resumed in some areas and is expected to be in full swing after May 20, brokers said.

However, unlike the previous seasons, there are no reports of shortage of irrigation water from the tail-enders in the central and lower Sindh cotton belt as the irrigation authorities have systemized the channel for the equitable supply, including the tail-enders, they added.

Official spot rates did not show any change and were steadily held at the last levels in the absence of large business in the ready section.

Ready offtake remained light as some brokers reported stray lots changed hands at around Rs2,525 to Rs2,550 depending on the quality of lint.