19 February 2005	Saturday	09 Muharram 1426

KARACHI, Feb 18: Physical activity on the cotton market on Friday shrank to modest proportions amid fears that steep decline in arrival figures of phutti for the fortnight ended Feb 15, could fuel the current run-up.

While spinners offered to buy a good number of lots around Rs2,200 or Rs2,150 depending on quality, ginners kept to the sidelines most of the time, apparently entertaining fresh increase in prices, brokers said

The current stand off between the buyers and sellers is expected to continue during the next week also as both will try to outwit each other, although ginners are in a commanding position, they added.

"What seems to have encouraged ginners to hold on to their positions was below market estimate unsold stocks", they said adding "mills and spinners still need about 3 million bales for the current season ending August 2005 but unsold stocks are far below their demand".

Although mill buying has touched the high mark of 11m bales, which is 3m bales more than the previous year during the same period. The total unsold stock lying with the ginners is around 1.121m bales.

Total phutti arrivals for the fortnight ended Feb 15 stood at 14.152m bales far below the earlier estimate and indications are that the figure of 14.5m bales may be hit in the backdrop of a sizable decline in arrivals during the last two fortnights, dealers said.

"Owing to higher exports in the post-WTO regime, the demand for the local textiles has significantly increased and mills and spinners may need about 13m bales to meet their export commitments", says a leading spinner.

Another lurking fear is possible increase in lint prices in the coming weeks and that too could upset their export projections in a tough competition from China and India.

All eyes are now focussed on TCP stock of 2.5m bales of fine lint but it is not clear whether or not it would come to the aid to textile industry or will prefer to export it, spinners said.

Official spot rates were, therefore, firmly held at the last levels, although stray deals were reported above them. New York cotton futures on the other hand suffered a fresh modest decline of 0.22 and 0.17 cents per lb for the ruling March and the distant May settlements at 45.98 and 46.66 cents respectively on renewed speculative selling.

Ready business was light totalling about 3,000 bales, the following being some of the notable deals: 1,000 bales, Shahdadpur at Rs2,050-2,100 and 1,000 bales, Rahimyar Khan at Rs2,200.