23 May 2004	Sunday	03 Rabi-us-Saani 1425

KARACHI, May 22: Cotton prices on Saturday showed a modest rise as spinners and mills made fresh covering purchases for the second session in a row.

Brokers said unlike the previous session most of the deals were finalized in line with the quality of lint, notably its staple length, and that was perhaps why the difference of Rs450 between the fine and low-mic lots was recorded.

Some of the fine lots from the southern Punjab cotton belt were done around Rs3,150 per maund, while some lots from the central Sindh ginneries of inferior quality were done at Rs2,700.

"I don't think ginners hold larger unsold stock of the low-mic lint", says a broker adding "most of the ginners sold them at much higher rates late last year when prices soared to Rs3,600 per maund".

Bulk of the unsold stocks with the ginners are of fine quality and that is why they are seeking higher prices in line with their phutti parity rates, he said.

"The interesting feature is that the local ginners have learnt how to fix prices on supply and demand factors rather than following the trend on the New York Cotton Exchange," he added.

"New York futures do have a relevance to local lint on the export front as importers quote their rates taking the ruling contract as a base rate", he says, adding "owing to lower and medium staple length of the fibre produced from the local lint, it is sold at discount of five cents per lb as compared to long staple US and Egyptian lint".

New York cotton futures suffered fresh fall of 0.54 and 0.75 cents at 63.00 and 60.35 cents per lb for both the ruling July and the distant October settlements, respectively.

But on the other hand, local spot rates were upped by Rs25 per maund at Rs3,025, while in physical trading some of the fine lots were sold well above this rate.

Meanwhile, reports coming in from the cotton belt indicate that the growth of the early sown crop, notably in the lower Sindh cotton belt is normal and there are no reports of pest attack because of extremely hot weather.

There were reports of shortage of irrigation water in the lower Sindh cotton belt, which the growers claim, could damage the standing crop if the situation did not improve.

In the upper Sindh and southern Punjab cotton belts, the sowing is well in progress and is expected to be completed by June 15, and where it is sown earlier tender plants are progressing well.

For the second session in row, spinners and mills remained active buyers and lifted about 4,000 bales, the following being some of the notable deals:

SINDH VARIETY: 200 bales, Tando Adam at Rs2,825, 400 bales, Mehrabpur at Rs2,800, 389 bales, Daharki at Rs3,100, 700 bales, Moroa at Rs2,700 and 200 bales, Gothki at Rs2,950.

PUNJAB TYPE: 400 bales, D.G.Khan at Rs3,150 and 400 bales, Khanewal at Rs3,100.