14 May 2004	Friday	23 Rabi-ul-Awwal 1425

KARACHI, May 13: The cotton market on Thursday maintained firm trend as ginners held on to their positions amid predictions of further increase in prices in the coming weeks.

Physical business was at a low ebb as spinners and mills think twice to cover positions above Rs3,000 because of their export parity limitations. Moreover steep decline in New York cotton futures has raised hopes of further decline, which in turn could enhance their import competitiveness during the weeks to come, dealers said.

But some of the brokers claim leading groups of the spinners never left the market and are regular buyers of fine varieties of lint. Even a day before they paid a four-month high price of Rs3.200 for fine lots, which means they have already made forward sales of higher counts of cotton yarn at competitive prices.

"The last quarter of the current fiscal could go down in the cotton history as a record year, both in terms of all-time prices of phutti and lint at Rs1,750 and Rs3,600 per maund," cotton brokers said. "History of late last year when all previous price records were beaten may be repeated," they fear.

The spinners claim that stocks of unsold cotton yarn are piling in their godowns in the absence of competitive prices from foreign buyers and higher lint prices. But on the other hand, there is a relative quiet on the ancillary industry sector as unlike the previous years, no one among them is complaining about the higher yarn prices for end-product users, market sources said.

Meanwhile, reports coming from the cotton belts indicate that there are no reports of pest attack in the areas where the crop is sown early owing to warm weather, which kills insects. The growth of the tender plants is steady.

Official spot rates were quoted further higher by Rs25 at Rs3,000 per maund excluding 15 percent sales tax, although in the ready section most of the deals are being finalized at much higher rates.

New York cotton futures suffered fresh decline to the extent of 1.00 and 1.25 cents per lb at 63.15 and 61.85 cents per lb for both the ruling July and the distant October contracts, respectively. Ready offtake was light as till late in the evening about 1,500 bales, from the southern Punjab ginneries changed hands between Rs3,000 and Rs3,150 per maund.