05 March 2004	Friday	13 Muharram 1425

KARACHI, March 4: Cotton prices on Thursday fell from the recent higher levels apparently in sympathy with international markets and slack demand from the local buyers.

Reports that world cotton production is expected to outstrip the consumption figure by a big margin of 0.4m bales has sent shock waves among the speculative traders the world over and some of them are indulging in panic selling.

"Massive battering of the New York cotton futures over the last couple of sessions reflects the prevailing panic on the world markets and its negative fall-out on the local market," analysts said.

Owing to higher productions in some of the countries including the US, Australia and some others, the total world production is placed at 102m bales as against the total consumption of 98m bales, a surplus of 0.4m bales. Last season's comparable figures being 91.90m and 96m bales respectively.

New York cotton futures on Wednesday were marked further down by 1.40 and 0.71 cents per lb at 68.59 and 70.02 cents per lb for both the maturing March and the ruling May settlements respectively.

The perception that local prices would fall further in line with the world rates, kept spinners and mills on the sidelines most of the session causing further decline in prices.

But ginners appear to be in mood to loosen their grip on the price line at least for the near-term, although some of them are certainly worried over the continued absence of spinners from the market, brokers said.

"The next few sessions are very crucial for the future price outlook," predicts a leading spinner. "Either we will have to opt for imports around the 64 cents per lb or to wait until local prices become competitive."

Spinners and mills are also awaiting the arrival figures of phutti for the fortnight ended Feb 29, which are expected to give a fair idea about the size of the crop and will allow them to refix their consumption priorities, market sources said.

Official spot rates were lowered by Rs25 per maund but some of the deals in the ready section were finalized well below them depending on quality. But fine lots both from the upper Sindh and the southern Punjab cotton belts continue to fetch higher prices as spinners need it for higher counts of cotton yarn for the export markets.

Ready offtake did not pick up in the absence of spinners and as a result about 1,000 bales, including 400 bales, Nawabshah changed hands at Rs3,050.