19 September 2004	Sunday	03 Shaban 1425

KARACHI, Sept 18: Cotton prices on Saturday eased further as some of the ginners tried to get out of their long positions followed by reports of higher arrivals of phutti into the ginneries.

"The arrivals were on the higher side of the analysts prediction reinforcing the perception of a bumper crop", says a cotton specialist adding "the panic among the ginners reflects that prices could ease further possibly by next week".

According to arrival figures released by the Pakistan Cotton Ginners Association (PCGA) for the fortnight ended Sept 15, 2004, the total swelled to over a million bales, more than double at 1.718m bales as compared to 0.406m bales a fortnight back.

Out of the total, spinners and mills had purchased 0.820m bales and the private sector exporters 6,500 bales, leaving an unsold stock of 0.247m bales with the ginners.

"It is pretty difficult to predict at this stage the negative impact of the higher arrivals on the future price outlook but leading ginners tried to hold the fort as long as possible", says a leading broker.

But it may not be an easy going for the growers as they have to match any further fall in lint prices to that of phutti to keep ginners competitive in line with the international prices.

"I fear the intervention by the Trading Corporation of Pakistan (TCP) may be imminent to ensure fair return on investment to the grower if prices fall from the current level", predicts an analyst.

The next week could be crucial for the future market direction as TCP has to intervene if phutti prices fall below the support level of Rs925 per 40 kg, he said.

There was a relative quiet on the market as both the buyers and the sellers adhered to the sidelines apparently awaiting an immediate impact on the current prices possibly by the next week.

Official spot rates were lowered by Rs25 per maund after remaining static for the last couple of sessions.

But on the other hand New York cotton futures rose from the current lower levels on strong speculative support and were quoted higher by 1.24 and 0.85 cents at 50.21 and 48.43 cents per lb for both the ruling October and the distant December settlements.

Ready off-take was light as spinners extended guarded support anticipating fall in prices when the trading resumes next week. The following are some of the deals, which went through late on Saturday evening: 1,000 bales, Shahdadpur at Rs2,275, 1,000 bales, Tando Adam at Rs2,225 and 1,000 bales, Mirpurkhas at Rs2,175 to Rs2,200.

PUNJAB VARIETY: 400 bales, Shujabad at Rs2,250, 1,000 bales, Muridwala and 400 bales, Gojra at Rs2,260 to Rs2,275.