June 10, 2003	Tuesday	Rabi-us-Sani 9, 1424

KARACHI, June 9: Cotton market on Monday reopened on a sluggish note as the post-budget session witnessed a terrible calm on the ready counter in the absence of buyers and sellers.

According to market sources, both the spinners and the ginners remained conspicuous by their absence apparently to have full view of the fiscal measures relating to the textile sector and its long-term positive impact on the cotton trade.

As far as the incentives and duty rationalization for various industrial sectors are concerned, textiles along with farm and cement groups appear to be on the top, although some of them need indepth study and their negative impact on long-term basis, they said.

There was, however, no word on cotton trade but it could be the beneficiary of the reliefs given to the textile sector with a view to boosting production and exports to earn more foreign exchange, they said.

“Whether or not some changes made in the sale tax regime will benefit the ginning sector and in turn the cotton trade is unclear,” says a leading broker adding “even the status quo in the backdrop of increase in phutti prices to Rs850 per 40 kg may not produce negative impact on their profit margins.”

The relative quiet in physical business is, therefore, understandable as parties concerned did not ride the bandwagon without having a long-term view of the fresh fiscals, he adds.

But some other hope the pre-budget lull in cotton trade will be broken during the next couple of sessions as fears about the adverse fiscal steps have almost been allayed, he said.

Meanwhile, reports coming from the cotton belt indicate that sowing of the new crop in the major growing area is nearing completion barring some pockets of southern Punjab and upper Sindh.

The growth of the earlier sown crop is claimed to be normal and there is no major incident of pest attack because of the continued heat wave in the entire cotton belt, market sources said.

After remaining static for the last about a week, official spot rates were marked down by Rs10 per maund depending on the quality of lint in trade.

But in the ready section there was a relative quiet as till late in the evening some of the local brokerage houses did not report any deal, saying spinners are expected to resume their normal covering operations by the next couple of sessions.