29 February 2004	Sunday	08 Muharram 1425

KARACHI, Feb 28: Active trading was witnessed on the cotton market on Saturday as some of the spinners made fresh covering purchases to supplement their stock positions ahead of Ashura holidays.

The current run-up in New York cotton futures to well over 70 cent per lb level followed by reports of heavy purchases being made by China also worried spinners and mills as it could well mean further increase in the local prices, dealers said.

For the last couple of sessions, notably after the re-entry of China on the world markets with a big shopping list imports had become more expensive creating problems for the spinners on the export front, they said.

It was perhaps in this background that spinners and mills had resumed local buying after a relative quiet for the last couple of weeks as fears of price flare-up in line with world prices haunt them.

New York cotton futures on Thursday finished further higher by 0.61 and 0.15 cents at 73.77 and 74.60 cents per lb for both the ruling May and the distant July contracts respectively, while the matured March rose by 0.60 cents at 72.10 cents per lb.

Although local ginners, who still hold a substantial unsold stock of lint, did not raise their asking prices in line with the world rates, indications are that the post-Ashura holiday trading could witness an upward movement.

Spinners are, therefore, making efforts to corner as many lots as they could at the prevailing rates but ginners appear to be in a mood to sell their inferior stuff, and are holding on to fine lots hoping an increase in prices in the coming weeks, market sources said.

According to unofficial figures, ginners still hold an unsold stock of about 2m bales but spinners have to import another 0.8m bales to meet their annual consumption needs. They had already made for deals with foreign exporters for the same quantity during the last couple of months.

Meanwhile, the highup of Karachi Cotton Association (KCA) and Pakistan Cotton Ginners Association (PCGA), are meeting in Rahimyar Khan on March 4, to finalize their recommendations for the resumption of hedge trading in cotton from the next season.

The Federal Food and Agriculture Minister, during his recent visit to the KCA to have cotton traders views on the new cotton policy has assured them to sort the issue pending for the last about three decades.

The prevailing optimism about the resumption of hedge trading has made the KCA licence more expensive as its selling price has increased to Rs0.9m from the previous Rs0.3m, market sources said adding "but there are no willing seller."

Official spot rates were again firmly held at the last level of Rs3,100 per maund although some of the fine lots were traded at much higher prices.

Ready offtake was active totalling about 8,000 bales, the following being some of the notable deals: 1,000 bales, K-68, Mandodaro at Rs3,200, 400 bales, Nawabshah at Rs3,050, 800 bales, Mehrabpur at Rs3,000, 400 bales, Sanghar at Rs2,950, 200 bales, at Rs2,700, 200 bales, Mirpurkhas at Rs2,600 and 200 bales, Rahimyar Khan at Rs3,100.