25 April 2004	Sunday	04 Rabi-ul-Awwal 1425

KARACHI, April 24: Cotton prices on Saturday modestly eased from the previous levels as some of the ginners lowered their asking prices for stray unsold stocks.

But in physical trading, fine lots from the southern Punjab cotton belt continue to fetch higher prices, followed by active short-covering being made by some leading ginners, brokers said.

The interesting feature is that most of the spinners and mills are indulging in big-lot business as the lint is getting expensive each day in the backdrop of higher New York cotton futures, they said.

"Spinners still need to bridge the supply gap after having imported so far a million bales from various sources," they said. "The big-lot business reflects leading among them have opted for the local stuff at least for the near-term."

Leading spinners, some of whom had already adjusted claims of a number of foreign exporters after paying price differentials, have some rethinking on the issue and prefer to buy the local lint.

Some of the local spinners failed to honour their import commitments made above the 70 cents per lb market after New York cotton futures fell to a recent low of about 60 cents and settled the foreign claims, market sources said.

They said world markets were still highly volatile, showing erratic either-way movement owing to strong speculative activity and the local spinners now prefer to keep out of it at least until prices stabilize in line with their export parity levels.

"Local lint prices are still attractive and as there is no chance of a manoeuvring because of lower unsold stocks the spinners are back in the market," the brokers said.

Despite having a fair idea about the short crop, the spinners and mills are not going all-out to grab the floating stock apparently under an unwritten agreement among them to contain prices within the current levels, they said.

Daily offtake is, therefore, generally confined between 10,000 and 15,000 bales, which in turn, keeps the ginners at their toes all the time, and instead of raising prices they try to sell their unsold stocks.

New York cotton futures on Friday ended mixed. While the ruling May settlement fell by 0.53 cents per lb at 63.95, the distant July rose by 0.55 cents at 63.81 per lb, followed by reports of rolling of positions from the former to the latter.

Official spot rates on the other hand fell by Rs25 per maund at Rs2,850 in line with an average rate at which grade-3 lint is being sold in the ready section.

Ready business was modest as till late in the evening about 6,000 bales changed hands as under: 1,700 bales, Rahimyar Khan at Rs2,900; 2,900 bales, Moro at Rs2,690 and 1,000 bales at Rs2,600.