09 April 2004	Friday	18 Safar 1425

KARACHI, April 8: Physical activity on the cotton market on Thursday failed to pick up as both spinners and mills were conspicuous by their absence, eyeing the recent negative developments on the foreign trading centres.

But despite being at the receiving end in the absence of strong mill demand, ginners are not inclined to lower their asking prices on the perception that they could be chief beneficiary of a short crop at the fag-end of the season.

However, an unsold of a million bales worth Rs12 billion and higher interest rates on them are certainly adding to their losses suffered by them after having purchased phutti at peak levels, brokers said.

"With private sector exporters remaining on the sidelines in a highly volatile world market and falling foreign demand, the spinners and mills are the sole buyers and they operate according to their own priorities," says a leading broker.

But some others claim that the spinners and mills are very much on the market and in most of the cases are making direct purchases from the ginners details of which are not immediately communicated to the Karachi Cotton Exchange.

According to them, on an average a ready business of about 20,000 bales is being done daily, the main purchasing centres being upper Sindh and southern Punjab where bulk of the unsold stocks are lying in the godowns.

Some of the leading ginners, who are holding on the bulk of the unsold stock to sell them at the higher rates are, however, trapped mid-way and may be some of the prominent losers, they added.

Reports from the New York Cotton Exchange were positive where the recent downward drift was halted after the revival speculative trade buying at the dips. "Whether or not its fallout on the other world markets will be positive will be seen during the next couple of sessions," brokers said.

New York cotton futures on Wednesday showed a fractional fall of 0.4 cent per lb for the May contract at 61.68, while its forward settlement was quoted unchanged at 63.76 cents per lb for the July settlement.

Official spot rates were firmly held at the last level for the third session in a row in the absence of price indicators from the ready section. Ready business was modest totalling 1,400 bales, from a southern Punjab ginnery, Haroonabad, done at Rs2,700 to Rs3,000 depending on quality of lint in trade.