12 December 2004	Sunday	29 Shawwal 1425

KARACHI, Dec 11: Physical business on the cotton market is drying up each session as price ideas of ginners and spinners failed to find a meeting ground for the last couple of days.

The interesting feature is that unlike previous seasons, the market is essentially being guided by the local factors and is not influenced bearishly by the trend on the New York Cotton Exchange, dealers said. Previously, it rose and fell in unison with the world markets.

Despite estimates of higher crop, the ginners are entertaining fresh boost in prices thanks to the strong presence of the TCP as a second buyer, brokers said. "The fact that it has already signed contracts for about 1.19m bales seems to have further intensified ginners' perceptions about a bull market."

But the spinners, who were a bit buoyed on the higher crop ideas as the arrival figure of phutti into the ginneries maintained a lead of over 50 per cent or 2m bales each fortnight from the beginning of the season and hoped for a market crash, were surprised as prices rose instead of falling, they said.

Throughout the current trading week, prices rose, though modestly, as the ginners did not oblige the spinners after firmly holding on to their unsold positions.

"There may be some procedural problems after trading with the TCP but better price is an attractive bait, which no ginner could miss," analysts said, adding that is what exactly happening.

Both the ginners and the spinners are, therefore, locked in a price-war in which the latter is appear to be on the losing side as is reflected by steady modest rise in prices each session, they said.

Physical business is, therefore, shrinking each session as the ginners are not inclined to sell below their asking prices as most of them now entertain price ideas well above Rs2,000 per maund.

Official spot rates were further revised upward by Rs40 per maund at Rs1,915 from the previous Rs1,875 in the absence of selling by the ginners.

New York cotton futures on the other hand suffered fresh fall of 0.55 and 0.74 cents per lb at 42.31 and 42.80 cents for the ruling March and the distant May settlements, respectively.

Ready offtake was light totalling about 15,000 bales, the following being some of the notably deals:

SINDH VARIETY: 5,000 bales, K-68 sawgin, upper Sindh at Rs1,975; 400 bales, Nawabshah at Rs1,875; and 400 bales, Mirpurkhas at Rs1,600 to Rs1,650.

PUNJAB TYPE: 3,000 bales, Rahimyar Khan at Rs1,975; 600 bales of Sadiqabad and 500 bales of Shujabad also at this rate; and 400 bales, Gojra at Rs1,850.