13 January 2004	Tuesday	20 Ziqa'ad 1424

KARACHI, Jan 12: Cotton prices on Monday eased from the recent higher levels as some of the ginners unloaded in part their long unsold positions followed by bearish signals from international markets.

The direction of the market was, however, not clear but any fresh hasty liquidation by some of the tired ginners could push prices further lower during the next couple of sessions.

However, most of the leading ginners are not inclined to take a bearish outlook for the cotton trade, brokers said. "Supply and demand are two dominating counter-market forces, which determine the future price structure."

Based on the crop projections, the future price outlook is in favour of the ginners and much will depend on their holding capacity at least for the next couple of weeks, they said.

Reports of larger imports of lint by the industry could work against the holding capacity but progressive ginners may not like to be at the receiving end until the exact import figure is known.

"The current wild guess about the letters of credit opened by the spinners and the mills for the import of lint may be on the higher side of shortfall," says a cotton analysts. "It is uncompetitive to buy foreign lint at the prevailing prices of around 75 cents per lb."

The spinners and the mills have to operate within the world textile export framework and higher input cost could rendered them uncompetitive as compared to their world competitors.

Moreover, despite a five per cent decline in the arrival figures for the fortnight ended Dec 31, 2003, it is too early to measure the size of crop shortfall at this stage, he said.

Official spot rates were also lowered by Rs50 in line with the fall on the ready counter, although fine lots were traded between Rs3,225 to Rs3,300 per maund as some of the spinners tried to cover their positions against forward sales of cotton yarn.

Ready business was fairly active as spinners tried to grab the floating stock at the lower levels. As a result, till late in the evening about 20,000 bales changed hands as under:

SINDH VARIETY: 1,000 bales from Khairpur at Rs3,175 to Rs3,200.

PUNJAB TYPE: 1,000 bales, Khanpur at Rs3,275; 600 bales, D.G. Khan at Rs3,300; 1,000 bales, Taunsa at Rs3,225; 3,000 bales, Shujabad at Rs3,300; 400 bales, Haroonabad at Rs3,250; 1,000 bales, Bahawalpur at Rs3,350; 1,200 bales, Sadiqabad at Rs3,200; 2,000 bales, Rahimyar Khan at Rs3.200 to Rs3,350; and 1,000 bales, Mian Channu at Rs3,000.