12 September 2004	Sunday	26 Rajab 1425

KARACHI, Sept 11: Cotton prices on Saturday showed highly erratic movements as ginners could not precisely decide how to behave in a trend-less market guided essentially by supply and demand factors.

An idea of price volatility may well be had from the fact that some of the deals were finalized as higher as Rs2,300 per maund and some other at Rs2,180 depending on the quality of lint in trade," analysts said.

After opening lower, the prices showed a modest improvement as mill demand picked up in the evening but spinners were not inclined to go beyond their export parity levels. It appears to be quality war as spinners and mills are after each average mic-bale and are willing to pay a bit more for those lots, which conform to their export standards, they said.

A rate difference of Rs120 between the average and low-mic lint reflects that price war between the spinners and mills to grab the floating stock of fine lots is at its peak as for as central Sindh type is concerned, they added. All the active participants, notably spinners, ginners and growers are in a state of uncertainty and could not set their immediate priorities or future line of actions.

But active covering purchases being made by the spinners are in line with their seasonal perceptions but one thing appears certain prices may not fall further irrespective of the crop size as spinners and mills need 13m bales plus during the current season to see the year through. However, market sources said spinners and mills were benefiting from the current uneven price movements on the New York Cotton Exchange and were lifting bulk of the lots being offered by the ginners at the current levels.

"The fears that the market is progressively slipping into the hands of growers are allayed by the recent prices movements", brokers said adding that in a broader sense, spinners are the guiding the market".

Meanwhile, reports coming from the upper Sindh and southern Punjab cotton belt indicate that growers are not holding back their stocks and selling them at the market rates, without awaiting the intervention of the TCP.

The TCP, which has obtained the credit line of Rs500m is still to enter the ready market and until then spinners will remain dominating force behind the market trend. New York cotton futures on Friday finished with an extended fall of 1.30 and 1.59 cents at 51.25 and 50.72 cents per lb respectively on speculative selling.

Local official spot rates on the other hand remained pegged at the last levels, although most of the deals were finalized below them.

Ready off-take was light totalling 5,000 bales in the Sindh type, the following being some of the notable deals: 600 bales, Mirpurkhas at Rs2,200, 200 bales, Sultanabad also at Rs2,200, 200 bales, Mirpurkhas at Rs2,180, 1,400 bales, Khipro at Rs2,225, 200 bales, Sanghar at Rs2,250, 400 bales, Tando Adam at Rs2,275 and 400 bales, Shahdadpur at Rs2,300.