October 12, 2003	Sunday	Sha'aban 15, 1424

KARACHI, Oct 11: Cotton prices on Saturday remained stable around the overnight levels but ready offtake was light as spinners made selective buying apparently in a bid to forestall speculative run.

The activity remained slow as the market was closed early owing to Shab-i-Barat as brokers prepare for the night prayers well in advance, says a broker.

Most of the deals in the Punjab variety where pest attack in some of the areas was serious were done at an average rate of Rs2,800 per maund both on late Friday evening as well as mid-day on Saturday.

But brokers said there was a perceptible restraint in mill buying under an unwritten agreement among the leading spinners in an effort to contain the current price flare-up.

“But we don’t think the cartel could contain any price flare-up sans speculative one caused by supply and demand factors,” they said.

They said reports coming from the major growing areas about the damage to the standing crop because of late pest attack were conflicting and which one to be believed “is pretty difficult at this time of the season”.

While officials stick to their original projections of 10.5m bales, spinners and mills having their own crop monitoring network claim the crop is short but how much is unclear at this stage.

However, the near-term price outlook appears to be bullish in the backdrop of international price trend fuelled by global shortage of the commodity as compared to rising consumption.

“The breach of the 70 cent per lb barrier by the New York cotton futures on Friday could cause again a sympathetic price flare-up here,” analysts fear.

New York cotton futures rose by 1.74 and 1.80 cents per lb at 71.54 and 73.86 cents for both the maturing October and December settlements, respectively, sending shock wave among the consumers all over the world.

“I fear local rates may follow suit as the current rise in world prices has made import more expensive and spinners will have to buy the local lint at the ginners’ options,” says a leading broker.

He said the presence of the private sector exporters who had so far purchased 38,178 bales might not be by bullish market factor aiding the current run-up, it was fear of a short crop which was fuelling the price flare-up.

It was in this background that official spot rates were lowered by Rs150 per maund in line with the overnight decline.

Ready offtake was light as till late Friday evening following notable deals were reported by some of the brokerage houses:

SINDH TYPE: 200 bales, Mirpurkhas at Rs2,600; and 200 bales, Tando Adam at Rs2,700.

PUNJAB VARIETY: 400 bales, D.G. Khan at Rs2,800; 800 bales Gojra, 400 bales Yazman, 200 bales Hasilpur, 200 bales Alipur, 200 bales Pir Mahal and 200 bales Jhang also at Rs2,800; 200 bales, Yazman at Rs2,825; and 400 bales, Bahawalpur at Rs2,900.