29 May 2004	Saturday	09 Rabi-us-Saani 1425

KARACHI, May 28: The cotton market on Friday maintained firm trend but physical business was relatively slow partly because of a short Friday session and higher asking prices by ginners.

Stray lots, however, did change hands as some of the Karachi-based spinners covered positions in the upper Sindh fine types, available at much lower rates than its southern Punjab counterpart, dealers said.

As widely speculated, higher import figure of 1.3m bales up to March 31, did not have any negative impact on the local prices, which are now guided by supply and demand factors, they said.

But rather the import has figure reinforced ginner perceptions that the spinners are doing a roaring business on the export front and they have the capacity to buy local lint at higher than the current rates, they said.

But the spinners say export orders from the foreign textiles, notably yarn importers are certainly above normal, their chief worry is to honour their export commitments well in time to keep export outlets in good order for the next year.

"It is not the question of parity levels as profit margins could fall or rise but it is our business reputation, which keeps us in the local market irrespective of the higher lint prices," the spinners say.

After remaining at the receiving end since January, the ginners are now in a better position and could sell their lint at their parity levels, which in turn could lower their losses suffered during the last couple of months.

According to market sources, the ginners were trapped after having purchased phutti at around Rs1,500 late last year, but lint prices fell below the Rs3,000 per maund level, exposing to them to higher price risks.

Meanwhile, reports coming from the upper Sindh and southern and central Punjab indicate that sowing of the new crop is progressing well despite reports of shortage of irrigation water in some areas.

Official spot rates were consolidated at the previous level in line with some of the deals finalized in ready section. Ready off take was relatively slow owing partly to higher asking prices and totalled about 5,000 bales as under: 400 bales, Dadu at Rs2,950; 600 bales, Rohri and 400 bales, Salehpat also at the same rate; and 1,150 bales of Dewan Muhammad, central Punjab, at Rs3,200.