10 April 2004	Saturday	19 Safar 1425

KARACHI, April 9: Dull conditions were again witnessed on the cotton market on Friday as both ginners and spinners remained locked in a price war but it appears to be a no-win situation for the both.

For the second session in a row the ready board on the Karachi Cotton Association (KCA) remained blank as there were no details of any official deal.

While ginners were not inclined to lower their asking prices for the fine lots below Rs3,000 per maund, spinners appears to be willing buyers of low-mic lots available below Rs2,800 per maund, which they need for blending purposes to produce blended cloth for the export market.

But some leading brokers claim, spinners and mills are not sitting idle and making direct purchases from the ginners at rates which suit to both and according to their parity levels.

According to market sources mills have significantly increased the ratio of polyester fibre after mixing it with low-mic lint and are producing blended cloth for the foreign markets as it lower the cost of the final product.

"The ratio of polyester fibre into cotton has increased from the previous average of 25 to 30 per cent to 40 per cent as most of the mills are maintaining the 60:40 ratio in line with the foreign demand", they said. As a result, demand for lint has decreased during the last couple of weeks, which in turn has a negative impact on the daily ready business, they said.

Meanwhile, reports coming from the polyester sector indicate that after a recent rise, prices are now stable despite steady covering purchases being made by the spinners. Reports from the New York Cotton Exchange are not that disturbing as they have been a couple of weeks earlier as futures are stable around the previous levels.

The ruling May contract was fractionally marked up by 0.3 cents at 61.71 cents per lb, while July fell by 0.12 cents at 63.64 cents per lb on renewed selling. Local official spot rates on the other hand were firmly held at the last levels amid a considerable decline in the ready business.

Unconfirmed reports said about 3,000 bales, both inferior and fine types from the southern Punjab ginneries changed hands between Rs2,700 and Rs2,950 per maund without 15 per cent sales tax.