07 March 2004	Sunday	15 Muharram 1425

KARACHI, March 6: Cotton prices on Saturday suffered a fresh setback as spinners kept to the sidelines most of the session apparently having an overview of anti-dumping duty imposed by the European Union on bedlinen.

"Exports of textiles including bedlinen to EU will not remain competitive after the anti-dumping duty of 13.1 per cent," Aptma sources said. "Its negative fall-out on the entire textile exports could be unmanageable."

European Union is one of the major importers of Pakistani textiles, notably bedlinen as its total annual imports are close to a hefty figure of $3b, spinners and ancillary industry sources said.

What is important is that the duty is not seasonal as its duration is billed at five years, and if the issue is not taken on urgent basis by the government, there may be a big jolt on the export front, they said.

Textiles accounts for about 65 per cent of the country's total exports of $10bn and indications are that the current year's target may not be achieved as four months are still to go before the year ends on June 30.

Already the local textile industry is facing a number of problems both on the local and foreign fronts, notable among them being higher lint prices, overheads and falling yarn prices.

Floor brokers said the anti-dumping will also have a negative impact on the lint prices as mill demand is expected to shrink in line with the feared fall in exports.

However, it will take some more days to fully analyze the next adverse impact on exports after calculating the total overhead costs and whether or not the products remain competitive in a highly sophisticated EU textile market, they said.

The immediate negative fallout of the duty was that spinners and mills remained conspicuous by their absence and did not make buying enquiries from the brokers about the ready supplies.

Official spot rates were marked down by Rs25 per maund at Rs3,050 but in the ready section some of the ginners lowered their asking prices, although there was no buyer.

After having received massive battering during the last couple of sessions New York cotton futures came in for modest short-covering and ended recovered by 0.40 and 0.61 cents at 68 and 69.48 cents per lb for both the maturing March and the distant May settlements respectively.

Ready business was nil but on Thursday evening the following deals were reported by the brokers;

SINDH TYPE: 2,360 bales, Jhole at Rs2,590, 1,000 bales, Shahdadpur at Rs2,600 and 500 bales, Shahpur Chakkar at Rs2,700

PUNJAB VARIETY: 1,600 bales, Liaquatpur at Rs3,100, 200 bales, Rahimyar Khan at Rs3,125 and 245 bales, at Rs3,150.