18 June 2004	Friday	29 Rabi-us-Saani 1425

KARACHI, June 17: Trading activity on the cotton market remained at a low ebb for the second consecutive session on Thursday as spinners and ginners watched the virtual slaughter of the New York cotton futures by the bear speculators amid fears of higher world production and falling exports.

Spinners were eying the foreign stuff after the ruling July contract on New York Cotton Exchange hit its 20-year low and they ordered their foreign agents to keep an eye on cheaper supplies.

In similar conditions as the prevailing one, buying and selling operations generally remained at a standstill as no one is inclined to take risk until the market stabilizes after the same set of sellers assume the role of buyers at the lower levels, some analyst said.

They said it was not clear whether or not the local spinners managed to secure some supplies at the falling prices through their foreign agents as official sources were silent on the issue.

Some of the ginners fear any further fall in New York cotton futures below the 50 cent per lb mark could have a negative bearings in financial terms on their unsold stocks, brokers said.

For the second session in a row, the ruling July contract suffered a limit-decline of 2.79 cents per lb at 51.53 amid predictions that it could breach through the 50-cent barrier if the current bear onslaught continues, they said.

The new crop October settlement also fell 1.26 cents per lb at 53.75 cents in sympathy but indications were that it had already touched its career-lows. Floor brokers said that the positive impact of withdrawal of 15 per cent sales tax on the cotton trade was yet to manifest in physical trading as it had been overshadowed by the steep decline in New York cotton futures.

Official spot rates remained pegged at the previous levels in the absence of ready business, which determines them after taking into account the average difference between the low and higher prices, they said. There were no reports of fresh ready business, although brokers said some of the local spinners were seeking stray lots to make up their short positions.