January 28, 2006	Saturday	Zilhaj 27, 1426

KARACHI, Jan 27: Trading on the cotton market on Friday remained slow as spinners withdrew to the sidelines after ginners raised prices beyond their export parity levels.

According to market sources leading ginners were quoting fine lots around Rs2,600 but spinners were not inclined to go beyond their export parity level of between Rs2,500 and Rs2,550 per maund owing to unsettled world textile markets to remain competitive.

“Tactical manoeuvring by both the sellers and the buyers to outwit each other appears to be chief dominating factor of the ready business and spinners are at the receiving end partly because of a short crop”, they said.

The near-term demand and supply factors tell that it may not be possible to contain prices within the current levels as short supply combined with higher world prices are expected to fuel a price flare-up, says a leading broker.

“Mills could curtail their daily intake to send bearish signals among the ginners but their holding capacity after the next fortnight’s arrivals may well prove a deciding factor as far as the future price outlook is concerned”, he added.

Spinners fear the recent increase both in lint and polyester fibre prices could significantly add to their production costs, which would have negative impact on the textile exports.

They attributed the current fall in their ready off-take to cost-related factors and their likely negative impact on their export competitiveness and in turn on the textile exports.

Although textiles export is picking up lowering their piling inventories but both local and foreign prices are still well below the higher prices of inputs including lint, they said.

Official spot rates were held unchanged at the previous level of Rs2,525 per maund but ginners were not inclined to sell at this level and kept to the sidelines.

New York cotton futures on the other hand posted fresh fractional rise of 0.5 cents at 56.48 and 57.74 cents per lb for both the ruling March and the forward May contracts respectively.

Ready off-take fell to about 5,000 bales in the absence of mill demand. The following are some of the notable deals: 1,600 bales, upper Sindh at Rs2,525 to Rs2,570, 200 bales, Duniyapur at Rs2,550 and 2,000 bales, inferior type at Rs2,300.