October 28, 2003	Tuesday	Ramazan 1, 1424

KARACHI, Oct 27: Cotton prices on Monday rose to a record level of Rs3,600 per maund as pent-up mill demand made its debut after Sunday’s closure.

Some big-lots from the upper Sindh and southern Punjab cotton belt, well-known for their fine quality were traded at Rs3,600 per maund as leading spinners and mills intensified their covering operations on the perception that prices could rise further higher, brokers said.

In sympathy with fresh increase in lint prices, phutti rates also rose to their pre-reaction level of Rs1,600 per 40 kg as the progressive growers are closely watching both on the local and foreign market fronts, they said.

“The cotton trade is in a virtual turmoil as its has engulfed the entire sector, notably the spinners and the ancillary industry who have to deal with their foreign buyers”, market sources said.

Reports of closure of a number of looms in the Punjab owing to sympathetic increase in cotton yarn prices may send negative signals among the foreign buyers of cloth and other made-ups.

“The chief worry of the end-product users is that most of them have signed export contracts for the quarter ending Dec 31, 2003 based on the rates of lint in early September but now prices have risen to all-time high, how to honour export commitments is a big question before them”.

Information available from the export houses indicate that their foreign trading partners are not inclined to bridge the price gap telling the locals “this is not their problem”.

“There may be many default on the export front if the foreign buyers would not come to their rescue”, one spinner fear and emphasised some official corrective steps to ease the situation”.

Meanwhile, speculation about the size of the crop remained a dominating market force behind the current price trend as the users could not precisely decide how to react to the changing supply scene.

There was no change in the official spot rates and were held unchanged at the weekend level of Rs3,400 per maund but in the ready section some of the fine lots were sold Rs200 higher at Rs3,600 per maund.

Ready business was modest owing to higher asking prices and till late in the evening about 10,000 bales, mostly from the Punjab cotton belt changed hands as under: 2,000 bales each Rahimyar Khan, Khanpur

and Dharki at Rs3,600, 400 bales, Leiha at Rs3,300, 200 bales, D.G.Khan at Rs3,450, 200 bales, Khanewal at Rs3,500, 200 bales, Mian Channu and 400 bales, Chichawatni also at Rs3,500.