05 May 2004	Wednesday	14 Rabi-ul-Awwal 1425

KARACHI, May 4: Trading on the cotton market on Tuesday resumed on a firm note after a three-day closure as ginners raised their asking prices followed by reports of falling unsold stocks.

The other contributory positive factor was fresh increase in New York cotton futures, which soared by a limit-gain for the ruling May contract and a sympathetic increase in the forward July settlement.

As a result, some of the fine lots from the Punjab ginneries were sold as high as Rs3,100 per maund, indicating further increase in prices after the final crop figures are released by the Pakistan Cotton Ginners Association (PCGA) around May 15, which will be the final crop figure.

According to market sources, the final crop figure may not significantly add to the latest total of 9.8m bales, which could have positive bearings on the overall total.

"What worries the spinners and mills is that falling local stock and the higher foreign lint could have a negative impact on their export projections during the last quarter of the current year ending June 30, 2004," they said.

"Indications are that the final crop figure is expected to leave an unsold stock of about a million bales, far below the annual consumption figure of mills for the last quarter."

That is perhaps why the market is expected to heat up during the next couple of weeks possibly before the budget and those ginners still hold substantial unsold stocks could balance their earlier losses, brokers said.

Some of the leading ginners have been at the receiving end after having purchased phutti at the all-time high rate of Rs1,600 per 40 kg and failed to sell their stock above Rs3,000 anticipating further increase in prices, they said.

New York cotton futures on Monday finished with a limit-gain of 200 points in the ruling May contract at 61.50 cents, while the distant July was marked up 0.88 points at 60.24 cents per lb.

There was, however, no change in the local official spot rates, which were firmly held at the last levels. Ready business was modest totalling 3,000 bales, the following being some of the notable deals:

SINDH VARIETY: 400 bales, Mirpurkhas at Rs2,400; and 400 bales, Setharja at Rs2,700.

PUNJAB TYPE: 400 bales, Haroonabad at Rs3,100; 600 bales, Mailsi at Rs3,100; and 900 bales, Chigoth at Rs2,875.