09 May 2004	Sunday	18 Rabi-ul-Awwal 1425

KARACHI, May 8: Physical business on the cotton market on Saturday remained at a low ebb as both buyers and sellers adhered to the sidelines because of law and order situation in the city.

Most of the markets close to the Cotton Exchange remained closed to mourn the death of over a dozen innocent persons in Friday bomb blast and its negative fallout was also evident in cotton trading, dealers said.

Apart from delivery problems, fears of further violence during the the mourning also kept buyers out of the market, they said.

However, reports coming from the upcountry markets indicate stray lots did change hands as there was no delivery problems. Cotton traders and ginners there observe Friday as weekly holiday instead of Sunday, and they back to normal physical trading on Saturday onward.

But some of the spinners and mills needing immediate supplies were said to be on the look out for willing sellers and managed to get a few lots from the southern Punjab ginners.

"The other worry of the spinners is the fresh steep increase in New York cotton futures," analysts said. "Spinners are faced with the twin problems of higher foreign lint and a local short crop and could not precisely decide how to keep wheels of industry moving at a break-even point."

New York cotton futures on Friday finished with limit-gain of 3 and 1.19 cents per lb at 64.75 and 63.52 for both the maturing May and the ruling July settlements respectively.

New York cotton futures are currently in the tight grip of speculative forces and until they loosen their grip on the price line, users elsewhere may remain at a receiving end, they predict.

All eyes are now focused on final crop figure due to be released by the Pakistan Cotton Ginners Association (PCGA), possibly by the middle of the next week and any marginal increase from the previous figures will be welcomed by the ginners.

Meanwhile, reports coming from the cotton belts indicate that despite problems of irrigation water in some of the cropping areas the new crop sowing operations are being judiciously carried out.

It was perhaps in this background that official spot rates were firm held at the last levels amid slow trading.

Stray lots from the central Sindh cotton belt changed hands but on the higher side as ginners are following the prevailing bullish trend on the world markets.

About 2,000 bales, changed hands including 600 bales from a Kot Lalu ginnery at Rs2,900 and 500 bales, for fine variety from a southern Punjab ginnery at Rs3,000.