February 5, 2006	Sunday	Muharram 6, 1427

KARACHI, Feb 4: Trading activity on the cotton market failed to pick up on Saturday as both spinners and ginners remained busy in assessing the likely impact of higher fortnightly arrivals of phutti on the future price outlook.

Only a couple of lots changed hands around Rs2,550 but there was no panic among the ginners still holding on to larger unsold stocks of 2.2m bales reassuring spinners to “play safe” in the coming weeks also,” brokers said.

The official figures released by the Pakistan Cotton Ginners Association(PCGA), have already allayed spinners’ fears of market estimates of a terribly short crop, they said.

“Up to Feb 1, the figure has already crossed the 12m bales mark,” says a leading cotton analyst adding that during the current month,” it could be close to a 13m bales mark or slightly below.”

There is a loud whispering in the market that some of the leading ginner groups are still holding on to stocks beyond recently announced official figures. Half a million bales on this account could be a safe guess, some others said.

Together with modest imports of fine types and wider use of polyester fibre to produce blended cotton yarn and cloth, spinners may now not worried over the future supplies and could contain prices within the current levels, which incidentally conform to their export parity levels, they added.

In futures cotton trading, spinners could well play an important role as far as future price outlook is concerned and ginners may remain at the receiving end followed by selling by some of them.

Unlike the previous season, the private sector exporters did not indulge in panic buying owing to unsettled export market amid either-way price movements. Their tally was light at 70,400 bales.

But according to official figures they registered another 12,000 bales for exports with the Export Promotion Bureau(EPB), the total during the current season being at 0.2m bales, bulk of which has already been physically shipped to various countries.

Official spot rates, therefore, resisted fresh decline and were quoted unchanged at Rs2,510 per maund.

New York cotton futures on the other hand showed divergent trends. While the ruling March contracts fell by 0.28 cents, the distant May rose fractionally at 56.95 and 58.42 cents per lb respectively.

Ready business was slack as till late in the evening about 2,000 bales including 200 bales, from Sadiqabad changed hands at Rs2,550.