08 February 2005	Tuesday	28 Zilhaj 1425

KARACHI, Feb 7: Cotton market ruled firm but physical business remained at low ebb owing to reports of fresh spell of winter rain in southern and central Punjab cotton belts.

Delivery of cotton bales which were purchased in the ready section during the last two days by some of the leading Punjab-based spinners and mills could not be immediately arranged as the rain water damages the quality of fibre, brokers said.

However, spinners and mills were buyers between Rs2,150 to Rs2,200 depending on the quality of lint for forward delivery during the next couple of days, notably after the current rain spell ends, they said.

"The future price outlook appears a bit bullish followed by analysts' perception that the total crop figure may not touch the widely speculated total of 15m bales".

The steep decline in the arrivals of phutti for the fortnight ended Jan 31, reflects that final figure could touch the high mark of 14.5m bales and that will mean that spinners may require local supplies, probably from the TCP to make up a possible shortfall in their annual consumption needs, they said.

Floor brokers said the actual supply and demand figures will be available during the next couple of weeks, possibly by the end of the current month and they will set the future price trend.

"China is also in the market and needs about 1.7m bales to build up a strong buffer stock", they said adding "any deal with it is expected to be on government-to-government basis rather than individual exporters". However, leading spinners and mills hope that the government would prefer to export valued-added textiles as the WTO is already in place rather than selling lint, they said.

Spinners and mills claim their annual consumption figure could touch the high mark of 12m bales plus keeping in view the pace of export orders and competitive prices and there may be supplies from the TCP to bridge in any gap.

It was perhaps in this background that official spot rates were further raised by Rs25, although in ready section stray business was done well above them.

Ready off-take was modest and confined mostly local basis, notably from the Sindh cotton belt as there was no delivery problem. About 5,000 bales, changed hands, mostly from the upper Sindh ginneries around Rs2,200 per maund and inferior stuff at Rs2,050 to Rs2,100.