May 28, 2003	Wednesday	Rabi-ul-Awwal 25,1424

KARACHI, May 27: The cotton market on Tuesday showed quietly steady trend but physical business remained at a low ebb in the absence of fresh buying offers from the spinners.

Trading resumed on a firm note as ginners held on to their positions on the perception that spinners could resume their local buying operations any time to cover their forward positions against the sale of cotton yarn to foreign countries.

But casual entry of spinners and mills into the local market reflects that despite holding short positions owing to a short crop, no one among them is in a hurry to indulge in panic buying, dealers said.

They said spinners and mills fully knew that any sign of nervousness on their part about the future supplies could send bullish signals among the ginners followed by a price flare-up, they said.

That is perhaps why prices of fine types are virtually static around Rs2,550 per maund on the higher side, while inferior types are being sold on quality basis.

Floor brokers also attributed the slowdown in mill buying to the proximity of the budget by early June. Various rumours about some fresh incentives in the new budget to the textile sector to further boost exports of the value-added textiles.

Spinners are expected to resume normal market operations possibly during the post-budget sessions as by that time the future outlook of the textile sector will be clear, they said.

Meanwhile, shipments of foreign lint purchased a couple of weeks earlier are steadily arriving both at the Karachi Port and the Port Qasim but there no reports of fresh buying by spinners or mills as leading among them are awaiting further fall in prices on speculative selling followed by reports of higher US crop ideas.

According to official figures 5.599m bales of lint cotton had already arrived into the godowns of mills and spinners up to May 17, 2003, while some more consignments under the earlier signed agreements are said to be well on their way to the local ports.

Out of the total 0.462m bales were unloaded at the Karachi Port and 97,670 bales at the Port Qasim.

Official spot rates were firmly held at the overnight levels at Rs2,485 per maund in the absence of ready business.

Ready offtake remained on the lower side as about 1,500 bales changed hands in some of the southern Punjab ginneries, purchased by the local mills there.