11 June 2004	Friday	22 Rabi-us-Saani 1425

KARACHI, June 10: Steady conditions were witnessed on the cotton market on Thursday as leading spinners and mills resumed their covering purchases against forward sales of cotton yarn.

About 4,000 bales changed hands, the day's highest rate being Rs3,200 per maund for fine and contamination-free lots. The average rate at which most of the deals were finalized was Rs3,100, dealers said.

"Spinners and mills appear to be following the price trend on the New York Cotton Exchange," says a leading cotton broker. "If prices fall there they keep to the sidelines anticipating further decline and if prices rise they resume local buying."

This the trading pattern being followed by the mills and spinners for the last couple of sessions despite the fact that they still need about 1.5m bales of imported stuff to meet their annual consumption needs, he said.

But some others attributed their absence from the market to keep prices within the current range as pani buying from them could push prices further higher on the strength of lower unsold stock of about 0.4m bales.

The spinners up to March 31 imported 1.322m bales since Aug 31, 2003 and may need another 1.5 to 2m bales to honour their export commitments before the arrival of new crop sometime in late July or early August.

According to market sources, the sowing of new crop, which normally was completed by June 15, might be extended by the end of June because of shortage of irrigation water in the major cotton growing areas of southern Punjab and upper and central Sindh.

But the new crop from the lower Sindh cotton belt, despite water problems, is expected to reach the market by late July or early August in modest quantities, they said. Sowing was also delayed here from the normal time that is February to March owing to water shortage.

New York cotton futures recovered from the previous lows on speculative buying and rose by 0.90 and 1.00 cent per lb for both the ruling July and the new crop October at 56.59 and 57.30, respectively.

But on the other hand, local spot rates remained basically unchanged from the previous level for the third consecutive session, although in physical business most of the deals are done well above them.

Ready offtake was modest totalling about 5,000 bales, the following being some of the notable deals, all from the southern Punjab cotton belt: 1,200 bales, Rahimyar Khan at Rs3,100; 900 bales, Naya Kot at Rs2,900; 800 bales, Khanpur at Rs2,900; 800 bales, Seenava at Rs3,175; 600 bales, Haroonabad at Rs3,200; and 200 bales, Chani Goth at Rs3,125.