06 May 2004	Thursday	15 Rabi-ul-Awwal 1425

KARACHI, May 5: Cotton market on Wednesday lacked normal trading interest as spinners and mills withdrew to the sidelines after ginners raised their asking prices. Further increase in prices of polyester fibre by the producers also added to their production costs and in turn making exports more expensive.

Market sources said spinners and mills have increased the use of polyester fibre to about 40 per cent in the recent past to make their export products more competitive on the world markets.

The local producers of cotton yarn and cloth are producing blended yarn and fabrics against their export orders, which in turn lower the higher costs of lint cotton, they said.

Information leaking from some of the leading brokerage houses claim that stray lots of inferior stuff did change hands between Rs2,400 and Rs2,700 per maund depending on the quality and fibre length of the stuff.

But ginners appear to be in no mood to lower their asking prices from Rs3,100 plus for fine and contamination-free lots from the southern Punjab cotton belt where bulk of the unsold stocks are still lying, dealers said.

It was perhaps in this background that the official spot rates were raised by Rs25 per maund at Rs2,900 excluding 15 per cent sales tax but spinners being in a terrible short positions were not inclined to leave the market at least for the near-term.

"Yarn prices both on the local and foreign markets are not picking up as compared to expensive inputs", spinners say "as a result, unsold stocks of yarn are piling up for the last couple of weeks".

Meanwhile, reports coming from the tail-enders of the central Sindh cotton belt indicate that new crop sowing may be a bit delayed owing to irrigation water problems.

However, the new crop in the lower Sindh cotton belt where it was sown earlier to suit the climatic conditions, was progressing well and may ripe around late June or early July, market sources said.

New York cotton futures came in for active selling and fell by 0.90 and 0.56 cents per lb for both the ruling May and the distant July contracts at 60.60 and 59.68 cents respectively. Ready offtake was light totalling about 2,000 bales of the inferior stuff, mostly from the Punjab ginneries.