15 May 2004	Saturday	24 Rabi-ul-Awwal 1425

KARACHI, May 14: The cotton market on Friday consolidated overnight gains as spinners and mills resumed their covering operations against their forward sales of cotton yarn.

The revival of mill demand in part was attributed to steep increase in New York cotton futures and fears of sympathetic price flare-up in local lint.

Unlike the previous sessions when the ginners had raised their asking prices to Rs3,200 per maund for fine varieties, leading among them obliged the spinners to buy at an average rates of Rs3,100 for quality lint from the Punjab ginneries, while its counterpart from the upper Sindh cotton belt was sold at Rs2,800.

"As the developing situation on the world market shows, I don't think the spinners and mills will be in a position to contain price around the current levels during the coming weeks," says a broker. "If demand and supply rules were strictly followed, the ginners may have an upper hand in sympathy with world markets."

By now the spinners have a fair idea about the total supplies through their private surveys and will try to grab the unsold stock at the sellers' options, he predicts, adding and in the process there is possibility of further rise in prices.

Leading spinner groups are claimed to have the capacity to buy lint at further higher rates as most of them had covered their annual consumption needs at much lower rates earlier in the season, market sources said.

They could make a good competitive average rate after having an overview of their higher and lower rates, but their weaker links may remain at the receiving end till the new crop arrives, the sources said.

The new couple of sessions will give a fair idea about the future price outlook as by that time the final crop figures will be released by the Pakistan Cotton Ginners Association.

New York cotton futures on Thursday finished with a limit-gain of 2.19 cents at 65.34 cents per lb, while its forward settlement was quoted higher by 1.25 cents at 63.10.

There was, however, no change in the local official spot rates, which were firmly held at the overnight levels.

Ready offtake was moderately higher totalling about 5,000 bales, the following being some of the notable deals:

SINDH VARIETY: 200 bales, Salehpat at Rs2,800; 600 bales, Rohri at Rs2,850; and 1,000 bales, Dadu at Rs2,750.

PUNJAB TYPE: 200 bales, Vehari at Rs3,125; 200 bales, Feroza at Rs3,100; 400 bales, Bahawalpur at Rs3,100; and 1,000 bales, low-mic Sadiqabad at Rs2,300.