July 4, 2003	Friday	Jumadi-ul-Awwal 3,1424

KARACHI, July 3: Physical activity on the cotton market is slowly picking up as spinners are covering their positions against forward sales of yarn to foreign buyers.

But their main thrust is on the new crop from the lower Sindh ginneries, which is available at much lower rates than the fine lots of the current crop.

Floor brokers said although the ready offtake in the new crop amounted to a couple of lots because the number of ginning factories that have resumed operations were limited, there was a pressure on immediate supplies.

However, spinners and mills lifted all the lots offered for sale by the Sindh ginners mostly on their asking prices amid fears that the current lull on the ready counter could be prelude of an imminent price flare-up, they said.

The snap bullish turn taken by the New York cotton futures has already changed the future world cotton outlook amid a loud whispering that the crossing of 60 cent per lb barrier by the forward October settlement could well mean expensive local prices in the months to come.

Leading ginners who are holding an unsold stock of about 80,000 bales of the current crop are, therefore, least worried over their inventories and sitting pretty comfortable on them hoping a better price during the next couple of weeks.

The perception is that higher world prices could cause sympathetic rise in the local rates during the next couple of weeks and spinners will have to resume local buying as foreign lint will be more expensive.

“The import of foreign lint may not be competitive at around 60 cents per lb as foreign buyers of cotton yarn may not agree to absorb the increase in lint prices in the end-products,” spinners claim.

Both the ginners and the spinners are pre-occupied with the rapid changes in the world cotton prices and are adjusting themselves accordingly to avert undue losses.

Meanwhile, reports of fresh bout of monsoon rain in some of the areas of Sindh and Punjab cotton belts have raised the prospects of a good crop during the new season, dealers said.

Light rain at this stage hastens the growth of new plantations and washes away insects reducing the incident of chemical spraying, they said.

New York cotton futures tended further higher by 0.15 cents per lb at 58.25 for the maturing July settlement, while the new October delivery was held unchanged at 59.88 cents per lb.

There was no change in the local official spot rates, which were firmly held at the previous levels.

Ready offtake was light as till late in the evening 400 bales and 200 bales of new crop each from Mirpurkhas and Sultanabad changed hands at Rs2,250 and Rs2,325 per maund, respectively.