26 March 2004	Friday	04 Safar 1425

KARACHI, March 25: The cotton market on Thursday passed through another dull trading session as spinners and mills kept to the sidelines despite being in short supply position. An increase of Rs75 per 40 kg to Rs925 per 40 kg in phutti price from the previous Rs850 for the new crop , sowing of which will start from May 15, could boost lint price further higher in the coming weeks.

During the current season, growers had sold phutti at an all-time peak level of Rs1,650 per maund followed by reports of a short crop owing to a late pest attack in the Punjab cotton belt. Leftover stocks with them are still being sold above the newly fixed official support price.

Floor brokers said the spinners were keeping to the sidelines anticipating further decline in prices in line with the international markets, the chief inspiring factor being the recent turmoil on the New York Cotton Exchange amid violent either-way price movements.

The fact that unlike previous years world supplies of lint are more than the actual annual consumption needs of the textile industry the world over is also keeping international prices unsettled, they said.

However, the local ginners are not inclined to toe the world price trend and are inclined to sell their unsold stock according to their phutti parity levels. "Both the spinners and the ginners appeared to be locked in a price battle," market sources said. "The former is basing their perceptions on a short crop and an ultimate increase in prices, while the latter is guided by the international situation and its likely negative impact here."

The current standoff between the two could continue for another couple of weeks until both have to follow the objective situation and the golden rule of supply and demand, they said.

The final crop figures will be available by the first week of the next month, and they are expected to set the price trend in the weeks to come prior to new crop arrival from the lower Sindh cotton belt.

Meanwhile, ginners appear to be least worried over their unsold stocks totalling about 1.2m bales of the same amount as they hope a better price during months of May and June well before the arrival of new crop from the lower Sindh in modest quantities.

Official spot rates did not show any change in the absence of active business in the ready section and were held unchanged. Ready offtake was also light as till late in the evening about 3,000 bales of low-mic lint changed hands between Rs2,700 and Rs2,850, mostly from the central Sindh cotton belt.