June 15, 2003	Sunday	Rabi-us-Sani 14, 1424

KARACHI, June 14: Cotton market closed the weekend session on a firm note as spinners and mills remained active amid fears of further increase in prices in sympathy with bullish trend on the world trading centres.

But brokers claim ginners who are seeking fresh rise in prices for their contamination-free lint are reluctant sellers anticipating the spillover of bullish trend of the foreign markets.

“The future price outlook appears to be a bit bullish based on the new crop forward rates”, they said “last season trading in the new crop was resumed around Rs2,250 per maund as compared to Rs2,350 for the next season starting from September 1, 2003”.

What supports this perception is higher phutti price at which the growers are selling their new crop stocks to the ginners, which point to higher lint rates.

“After having purchased phutti at Rs1,050 per 40-kg against the official support price of Rs850, no spinner obviously could think of lower lint rates”, market sources said.

But they said initial higher rates of phutti are generally guided by pressure on the supplies of the new crop and when the arrivals get normal prices start falling as growers needing money lower their selling rates.

But New York cotton futures ruling well above the benchmark of 55 cents per lb tells a different story about the future price outlook, which will be unlike the previous sessions and will be largely guided by the supply and demand factors.

“China is short of a normal crop and so are India and Pakistan and added to it are Sars-led fears in the far eastern markets, major consumers of local cotton yarn and cotton, all bullish factors judged by any standard”, market sources said.

Spinners and mills are preparing a long-term strategy to keep a judicious balance between the supplies of new crop and competitive prices in line with the export parity level but indications are that it may not be an easy task, they said.

Meanwhile, reports coming from the lower Sindh cotton belt indicates that condition of the crop is normal and per acre yield is in line with the original estimates.

New York cotton futures attracted weekend selling after last couple of sessions’ persistent rise as both the ruling July and the forward October settlements were marked down by 0.63 and 0.51 cents per lb at 55.04 and 57.67 cents per lb.

Official spot rates on the other hand remained pegged at the previous levels, although most of the deals being transacted in the ready section are finalized at much higher prices.

Although there were a number of enquiries from the local spinners but till late in the evening no deal was reported owing to higher asking prices by the ginners for both the current and the new crop.