July 24, 2003	Thursday	Jumadi-ul-Awwal 23, 1424

KARACHI, July 23: Firmer conditions were again witnessed on the cotton market on Wednesday as reports of fresh rain in the lower Sindh belt further accentuated the supply position of new crop.

Picking operations of phutti were again suspended in some of the lower Sindh cotton belt owing to fresh rain spell, and fears of further delay in arrivals of new crop caused a fresh price flare-up.

Stray lots that changed hands were finalized at a uniform rates of Rs2,400 per maund, although spinners appear to be reluctant buyers at this level because of export parity levels of the finished products, dealers said.

They said the current rain spell had altogether changed spinners perceptions about the supply and demand factors and instead of hoping for an adequate supplies, they were faced with the problem of short supply.

No one could dispute the fact that mill consumption of lint could touch all-time higher level during the current season owing to various positive developments, including increase in quota, higher prices of textiles on the world markets and resumption of commercial operations by a number of sick units, analysts said.

But as they are unsure about the local supplies despite earlier reports of a bumper crop, there is some rethinking on the issue in the backdrop of reports of higher world consumption at 98 million bales against the total supplies of 94 million bales, leaving a supply gap of about 4 million bales.

What worries spinners and mills is the perception that lint prices could further rise from the current levels if the arrivals of the new crop did not get normal by middle of the next months, dealers said.

According to industry sources, the mill consumption during the current season could touch the high mark of 1.3 million bales of lint and the gap of supply will be bridged through imports.

Meanwhile, fresh steep decline in New York cotton futures has raised hopes of cheaper imports for the textile sector provided the current speculative selling continues. Both the ruling and forward December settlements fell by 1.39 cents per lb each at 57.91 and 59.67 cents per lb, respectively.

Official spot rates did not show any change in line with those at which physical trading is being done.

Ready offtake was modest as till late in the evening about 1,000 bales of new crop from the lower Sindh ginneries changed hands as under: 600 bales, Pithoro at Rs2,400 and 100 bales, Mirpurkhas also at Rs2,400.