05 December 2004	Sunday	22 Shawwal 1425

KARACHI, Dec 4: The cotton market on Saturday confidently absorbed a possible negative fall-out of larger than analysts' prediction arrivals of phutti into ginneries for the fortnight ended Nov 30 as prices stayed unchanged amid light business.

According to latest arrival figures of phutti released by the Pakistan Cotton Ginners Association (PCGA) for the fortnight ended Nov 30, the figure of 10m bales has been surpassed as the fortnightly increase was maintained at about 2m bales since the start of the season. However, it is speculated that there could be a considerable decline during the next fortnight as arrivals of phutti have almost dried up in major producing areas, analysts said.

"Price may not fall from the current level as bottom seems to have already been hit," they said, adding that "the perceptions that total crop may be far below the annual consumption needs of the textile sector could keep the ginners in a positive mood."

A good crop is a gift of God for the country after a couple of lean years and what the ginners need are a little patience and a strong holding capacity for sometime to stem the panic selling.

The textile sector will need about 13m bales of lint to see the current year through, brokers said, adding that some of them are surplus stocks of the last year's imported stuff, but the local lint could remain spinner envy for various reasons.

The fall in physical trading and light ready offtake reflects that the ginners have already decided to protect their interests and have not allowed further decline in prices in the strong presence of the TCP, they said.

According to the PCGA figure of 10.855m bales as compared to the previous fortnight's total of 8.161m bales, the spinners and mills had so far purchased about 7m bales, going a long way to cover the gap between demand and supply, while the ginners hold an unsold stock of 2.208m bales.

Some of the ginners may indulge in hasty selling to improve their liquidity positions as a massive amount of Rs20 billion is tied to the unsold stocks, but prices could stay around the current levels with minor adjustment in line with the quality differentials, some others said.

Official spot rates were, therefore, again firmly held at the overnight levels despite a sharp fall in the New York cotton futures. While the ruling December contract was marked down by a limit-fall at 45.25, off 2.15 cents per lb, the forward March settlement was fell by 1.20 cents per lb at 42.42 on renewed higher crop related speculative selling.

Unlike the previous active sessions, ready offtake fell sharply lower as the ginners held on to their positions rather than lowering their asking prices.

The following are some of the notable deals, which have gone through: 4,000 bales, Multan at Rs1875 to Rs1,885; 2,000 bales, Rahimyar Khan at Rs1,885 to Rs1,900; 1,000 bales, Sadiqabad at Rs1,875; 1,000 bales, Yazman at Rs1,875 to Rs1,880; 1,000 bales, Gojra at Rs1,850; and 2,000 bales, Bahawalpur at Rs1,875.

There were stray enquiries for the Sindh lint but as the ginners were not inclined to lower their asking prices, physical business remained dull.