06 June 2004	Sunday	17 Rabi-us-Saani 1425

KARACHI, June 5: Forward trading in the new cotton crop resumed on Saturday after a ginner from the lower Sindh signed a maiden deal for 200 bales at Rs2,800 maund excluding 15 per cent sales tax to be delivered between August 15 and 25.

"The new crop rate reflects that prices will stay on the higher side during the next season also, at least initially, but they may come down after the arrivals gather momentum," spinners said.

A delay in sowing in the major cotton producing areas both in Sindh and Punjab because of shortage of irrigation water could well mean a delay in picking operations of phutti and in turn further increase in prices owing to a pressure on ready supply.

The spinner who purchased the two lots has already deposited Rs0.1m for each lot to ensure prompt delivery between the specified time to avoid default on the part of any of the contenders, brokers said.

They said more deals are expected to be in the pipeline as the final crop figure at 9.795m bales did not show much improvement from the previous fortnight's total of 9.790m bales, showing a marginal increase of 5,000 bales.

In the previous years, cotton from the lower Sindh generally arrives on the market in late June or early July, but owing to shortage of irrigation water the sowing in the lower Sindh was also delayed, they said.

Local ginners claim the new crop from the lower Sindh cotton belt will start arriving in large quantity after Aug 15, as by that time some more ginneries are expected to resume their new season.

According to final arrival figures, the spinners and mills had purchased up to June 1,8.961m bales and private sector exporters bought only 0.180m bales, leaving an unsold stock of 0.663m bales with the ginners.

Having a fair idea of crop shortage, leading textile groups have so far imported 1.4m bales from various sources and may need another 0.3m bales to meet their annual consumption needs before the normal new crop arrival, market sources said, adding "and in between, prices could rise further."

New York cotton futures modestly recovered from the recent lows on short-covering and were quoted higher by 0.76 and 0.50 cents per lb at 57.80 and 57.75 cents for both the ruling July and the new crop October settlements, respectively.

Local official rates on the other