24 July 2004	Saturday	06 Jamadi-us-Saani 1425

KARACHI, July 23: The cotton market on Friday reacted positively to the Trade Policy 2004-05, maintaining status quo on the foreign trade and a number of incentives to the textile sector.

Floor brokers said the major thrust of the new policy appeared to give the needed boost to the textile sector, whose share in the export trade was about 65 per cent.

Apart from a number of incentives for other export-oriented sectors, the textile sector is the chief beneficiary and if goes well on the new crop front, the export target of $13.7bn is not that ambitious, they said.

"The perception is that mill intake of lint by the spinners and mills during the new season could keep prices stable around the current levels," says a ginners commenting on the Trade Policy.

He said free cotton trade provides a level-playing field for all the players and unlike the previous season, the sailing this year may be smooth for the spinners and the growers as well as the ginners.

"The incentives given to the textile sector aim at giving the needed push to it to face the post-WTO challenges in a competitive market," some analysts said. But the spinners and mills are worried over the current turmoil on the world textile front owing to falling yarn prices in the backdrop of unstable New York cotton futures and its negative impact on the end-products.

After having fallen sharply lower during the last couple of sessions, lint prices have stabilized at around Rs2,500 per maund or slightly below it for both the new and old crop fine lots as the spinners have resumed new crop buying though on a modest scale.

The official spot rates were firmly held at the last close as most of the deals in the ready section were done in line with them. New York cotton futures on the other hand remained under bear speculative squeeze and fell further by 1.15 and 1.16 cents per lb at 46.85 and 47.02 for both the ruling October and the distant December settlements, respectively.

Ready off take was light totalling about 4,000 bales, both for the current and new crop as under:

NEW CROP: 100 bales, Sahiwal at Rs2,450; 100 bales, Chichawatni at Rs2,500 and 100 bales at Rs2,475.

CURRENT CROP: 2,100 bales, Shujabad at Rs2,475 and 500 bales, Rahimyar Khan at Rs2,500.