November 4, 2003	Tuesday	Ramazan 8, 1424

KARACHI, Nov 3: Physical business on the cotton market on Monday shrank to a modest proportions as ginners and spinners were locked in a price war but the standoff continued till the closing bell.

However, the general perception is that prices are expected to ease from the current higher levels as New York cotton futures will fall further from the five-year peak levels followed by reports that the China is harvesting a normal crop at the previous year’s level of 4.90m tons.

The current price flare-up in New York cotton futures was attributed to reports that China is seeking half a million bales to cover its local crop shortfall caused by floods in July.

Speculative selling by the leading world parties may further depress New York cotton prices in the coming weeks and its negative fallout will be visible on the local market, floor brokers said.

It was perhaps because of this perception that leading spinners have slowed their daily intake, which in turn could keep ginners at their toes in the coming sessions.

“We can’t sell lint below Rs3,300 per maund after having purchased phutti at Rs1,450 to Rs1,550 per 40 kg,” says a leading ginner. “Growers are holding on to their stocks of phutti and are not willing to sell them below Rs1,450 to Rs1,550.”

While ginners again raised their asking prices and were not willing to sell quality lots below Rs3,300 per maund, spinners were buyers at Rs3,200. Inferior quality lint was, however, available at Rs2,900 to Rs3,100 from the central Sindh.

Floor brokers said leading spinners who have firm export orders till Dec 31, 2003 have already covered their positions both at the lower and the higher rates and are in the process of taking stock of their inventories but their weaker links are worried over the price flare-up as they have mostly cater to the needs of the local ancillary industry.

The comparative increase in yarn prices based on the lint has eroded their export competitiveness and are said to be worried “how to honour their export orders,” they said.

Ready business, therefore, remained light as buyers and sellers were awaiting the opening of the New York cotton futures market late in the evening and then to name their prices.

Official spot rates were, however, lowered by Rs50 at Rs3.250 but ginners were not inclined to sell at these rates.

Ready offtake was light as till late in the evening about 5,000 bales, mostly from the Punjab ginneries changed hands, the following being some of the notable deals: 200 bales, Muridwala at Rs3,200, 200 bales, Gojra at Rs3,200.00, 400 bales, Chichawatni at Rs3,300 and 400 bales, Hasilpur also at Rs3,300.