13 February 2004	Friday	21 Zilhaj 1424

KARACHI, Feb 12: Cotton market on Thursday lacked normal trading interest as spinners again adhered to the sidelines awaiting further developments on the world markets.

Official spot rates were further reduced by Rs25 per maund for the third day in a row at Rs3,175 and brokers predict further erosion until spinners resume their covering operations.

"But spinners future price perceptions may not be in line with the falling world prices as holding capacity of leading ginners is fairly strong and they would await a technical rebound in the New York cotton futures," they added.

The reports that India is in the world market to purchase another 0.2m bales after having already bought 0.1m bales could put a halt on further price erosions, they added.

Cotton analysts said it was not that easy to predict the future price trend in a volatile market, which was currently in the tight grip of speculative traders, and the clear picture would come out after the dust settled down.

"Nobody was expecting the virtual crash of the New York cotton futures a couple of days but leading speculators could perform miracles any time tilting the price balance in their favour," they said.

It was perhaps in this background that some of the ginners lowered their asking prices for the inferior types but spinners appear to be in no obliging mood.

"We will certainly resume our covering operations after local prices fall in line with world parity rates," says a leading spinner. "Some of us have already made modest deals for late March delivery around 64 to 65 cents per lb."

Each fall in the world prices could attract more orders from the spinners as most of them still hold short positions as against their annual consumption needs, he adds.

New York cotton futures on Wednesday suffered a fresh fractional fall for the maturing March contract at 84.94 cents per lb, while the ruling May delivery fell by 0.33 cents at 66.94.

Meanwhile, official sources said mills consumed 0.946 and 0.942m bales of lint cotton in August and September 2003, keeping the average monthly figure on the higher side as compared to a year ago. Ready offtake was light as till late in the evening 400 bales of inferior quality from Sanghar changed hands at Rs2,700 per maund.