22 February 2004	Sunday	01 Muharram 1425

KARACHI, Feb 21: Trading on the cotton market on Saturday remained insipid as spinners and mills were not inclined to make bigger commitments owing to conflicting reports about the size of the crop.

The official cotton crop assessment committee, representing all the sectors of the cotton economy, which met in Multan on Saturday, still stick to its revised crop figure of 10m bales, ginners are not inclined to go beyond the figure of 9.6m bales, market sources said.

Although spinners have their own crop monitoring system, but they could not decide precisely which figure is accurate and prefer to keep to the sidelines having an eye on the world cotton markets, they said.

As a result, for the last two months their daily offtake has fallen to a couple of thousand bales at this time of the season when they make hectic covering purchases against their forward sales of cotton yarn to the world buyers.

Though worried over the falling mill demand, ginners were firmly holding on to their unsold positions and were not inclined to lower their asking prices at least for the near-term.

"The battle of wits between the two is at peak for the near-term but indications are that ginners could be final winner on the strength of a short crop", predicts a leading cotton analyst.

Highly erratic price movements on the New York Cotton Exchange was another destabilizing factor as spinners were making guarded purchases hoping further decline in the world prices, brokers said adding "as the spinners have to cover forward positions through imports owing to a short crop, they are keenly watching external developments on the world cotton front."

On the local front, conflicting reports about the size of the crop did not allow normal trading as both the ginners and the spinners were operating according to their future price perceptions, thus consequent decline in ready offtake.

Ginners were worried over the larger unsold stock worth about Rs17bn, causing an enormous drain on their financial positions and until mills resume their normal buying operations the standoff will continue, they said.

New York cotton futures on Friday turned mixed followed by rolling of forward positions from the maturing March contract to the ruling May. While the former finished lower by 0.20 cents at 67.69 cents per lb, the forward, May contract, rose by 0.48 points at 70.26 cents per lb.

Official spot rates on the other hand remained basically unchanged from the overnight levels at Rs3,150 per maund.

Ready mill offtake remained light totalling about 5,000 bales, the following being some of the notable deals: 1,000 bales, Khairpur at Rs2,850 to Rs2,900, 3,000 bales, Khanpur at Rs3,125 to Rs3,260 and 500 bales, Sadiqabad at Rs2,900.