October 21, 2003	Tuesday	Sha'aban 24, 1424

KARACHI, Oct 20: Trading on the cotton market on Monday resumed on a higher note but unlike the previous week spinners made selective buying in an apparent effort to contain the current bull-run.

The slowdown in mill buying was caused by the decisions taken in the previous week’s Aptma meeting to protect the interests of its weaker links, that are mills operating on daily basis owing to financial constraints, brokers said.

But prices are still on the higher side and need some softening so that spinners and mills could remain competitive on the world markets after value-addition, they said.

However, the market is still unsettled amid conflicting reports about the damage to the standing crop in the southern Punjab cotton belt.

“The current price flare-up is speculative and is caused by the speculative forces,” claims a leading spinner “there is a damage to the crop to the extent of 10 to 15 per cent but in any case total output may not fall below the 10.5m bales”.

He predicts growers may not be in a position to hold on to their stocks of phutti for a long period because of quality factors and once they resume normal supplies to the ginners prices will fall progressively from the current level.

Already, most of the leading growers including the ruling elite have received all-time high price of Rs1,600 per 40 kg and ginners may not be willing to pay more as they have to keep lint prices competitive.

Meanwhile, reports coming from the yarn market indicate that the end-product users have reduced their yarn intake after an increase in prices in sympathy with lint as leading among them have already covered their forward sales of textiles for the current quarter ending Dec 31, 2003.

On the export front, private sector exporters have sold 23,818 bales since Aug 1, 2003 to various countries, while spinners have imported 91,647 bales from July up to the current month.

Official spot rates were further raised by Rs100 per maund to Rs3,400 per maund but in physical trading some of the fine lots were traded above them and inferior ones below this rate.

Ready off-take was relatively slow as till late in evening about 10,000 bales, mostly from the southern Punjab cotton belt changed hands between Rs3,300 to Rs3,500 per maund.