November 26, 2003	Wednesday	Shawwal 1, 1424

KARACHI, Nov 25: Pre-Eid holiday mood prevailed on the cotton market on Tuesday as both buyers and sellers kept to the sidelines most of the time because of delivery problems.

Leading ginners were, however, a bit worried over the fresh sharp decline in the New York cotton futures, which according to them, could have a sympathetic impact on the local prices when the market reopens after Eid holiday, says a leading broker.

Unlike the previous sessions, much of the discussions in the leading brokerage houses remained centred on the near-term price outlook and whether or not one should buy or sell at the current rates, he said.

The general perception is that the local prices have already touched their best levels and will fall to a realistic level after the holidays based partly on quality and international parity levels.

New York cotton futures late on Monday, fell beyond the limit-fall, off 3.73 and 3.00 cents per lb for both the ruling December and the distant March settlements at 63.87 and 70.09 cents per lb respectively.

The ruling contract at one stage a couple of weeks earlier had touched its 15-year peak level at 84 cents per lb before falling to the current level of 63.87 cents per lb.

“A decline of 20 cents per lb over the last couple of weeks, notably after the local prices peaked to Rs3,600 per maund, has provided a pretty long manoeuvring leverage to spinners and mills to look at the world markets”, says a cotton analyst.

Fearing a wide supply gap owing to a short crop, most of the leading mills and spinners have already booked over half a million bales, mostly in line with their export parity levels. The current fall in New York futures has made things more easy for them but they may not go all out for the foreign lint around 63 cent per lb level.

“Local prices may fall in sympathy with the foreign lint during the post-Eid holiday trading owing to an expected panic among the ginners and hasty selling by some of them”, market sources said.

Never before, the cotton trade has been so uncertain as it has been during the last couple of weeks as fortunes constantly fluctuated either in favour of the ginners or the spinner, both remaining at the receiving end but grower sat comfortable having got more than a fair price for his produce.

Normal trading is expected to resume after the market reopens on next Monday and spinners are hoping a price tilt in their favour, dealers said.

Official spot rates, therefore, remained pegged at the last close in the absence of fresh business in the ready section.