14 April 2004	Wednesday	23 Safar 1425

KARACHI, April 13: Cotton prices on Tuesday stayed firm around the previous levels but alarm bell rang among ginners after New York futures fell below the crucial level of 60 cents per lb.

"It may now be pretty difficult to hold the price line in the backdrop of negative fallout of the bearish price outlook," says a leading ginner, who still holds a sizable unsold stock. "The absence of spinners from the market could prompt selling from the weak-holders and the consequent decline in prices."

New York cotton futures on Monday fell by limit-losses of 2.95 cents per lb for both the ruling May and the forward July settlements at 58.56 and 60.69 cents, respectively.

Some leading spinners say the fall of New York cotton futures below the 60-cent level is welcomed irrespective of the fact whether it makes them more competitive or not, some brokers said.

"We are weighing the price differential between the local and foreign stuff before resuming fresh buying," spinners say. "If world prices fall further we will make fresh forward covering purchases."

The current steep fall in New York cotton futures on speculative selling could make the local spinners more competitive on the export front if prices fall further.

"An immediate negative fallout on the local prices may not be visible as the ginners will try to maintain a status quo at least for the near-term after keeping off the arena," one broker predicted but said, "if the current bear-run on world prices further intensified it could unnerve the spinners and the consequent panic selling."

According to market sources, the spinners have to import about 2m bales of lint to make up the expected local crop shortfall against which leading among them had already imported about 1.2m bales so far.

Owing to modernization and expansion programme undertaken by the textile sector during the last three years, its annual consumption intake has risen to 12m bales plus, they added.

Official spot rates remained pegged at the last levels and may be lowered in line with the world prices during the next couple of sessions. Ready offtake was modest totalling about 2,000 bales, the following being some of the notable deals: 400 bales, Sakrand at Rs2,400; and 800 bales, Sadiqabad also at Rs2,400.