20 April 2004	Tuesday	29 Safar 1425

KARACHI, April 19: Trading on the cotton market on Monday resumed on a firm note as spinners and mills continued to cover their forward positions against foreign sales of cotton yarn for the last quarter of the current year.

The lower than market expectation arrival figures released by the Pakistan Cotton Ginners Association for the fortnight ended April 15, at around 9.8m bales was another positive factor, brokers said.

Both the spinners and mills have been expecting the latest arrival figure of phutti close to the 10m bales mark, but it fell short of their estimate and pushed prices further higher.

Some of the deals in the ready section for fine lots were finalized at their previous peak level of Rs3,000 per maund as the ginners had raised their asking prices partly because of higher world prices and owing to an expected pressure on ready supplies before the arrival of the new crop from the lower Sindh cotton belt.

"What seems to have un-nerved the spinners and mills was terribly lower unsold figures of lint at about 10.647m bales lying with the ginners," market sources said. "It could well mean more foreign exchanger spendings on import of lint to make the local crop shortfall."

The market expected to heat up again during the coming weeks and indications are that the spinners will be at the receiving end as they have to pay more on the local supplies, they said.

Moreover, higher world prices in the backdrop of hectic speculative activity will make import more expensive, leading to further cash-push on the export front, they added.

Analysts said the cotton situation was becoming difficult each day as supply and demand factors were assuming an alarming proportions, which could have an adverse impact on the textile exports at the end of the current year.

Although some of the spinners and mills have made substantial covering purchases in anticipation of crop shortfall, they still to have go a long way to cover positions against their rising consumption needs, they added.

As a result, official spot rates were further raised by Rs25, but in ready section some of the deals were done well above them. Ready offtake was light totalling about 5,000 bales, the following being some of the notable deals: 2,547 bales, K-68 Sawgin, Rohri at Rs2,500; 1,370 bales, Soja Khanpur at Rs2,925; 400 bales, Chingoth at Rs2,900; and 200 bales, Rahimyar Khan at Rs3,000.