April 26, 2006	Wednesday	Rabi-ul-Awwal 27, 1427

KARACHI, April 25: Physical trading on the cotton market on Tuesday failed to pick up as both spinners and mills kept to the sidelines most of the time apparently awaiting fresh developments on the supply and demand front.

But some of the brokers reported stray business at higher levels as the ginners were not inclined to lower their asking prices on the perception that they are now in a commanding position and could sell their stocks at their asking price.

Unsold stocks of phutti are falling by each session as leading groups whose hands are full with export orders are cornering the floating stock at ginners’ asking prices, they said.

“Higher asking price by the ginners is a chief factor behind the falling ready mill offtake,” spinners said, adding: “As exporters we could hardly go beyond our parity level.”

That is perhaps why ready business is terribly insipid despite the fact that about 0.7m bales unsold stock of lint are in ginners’ godowns who also claim some price parity problems after having purchased phutti at around Rs1,100 per maund at the end of the season.

The standoff on ready counter has been continuing for the last couple of weeks and spinners’ supply gaps are being filled in through TCP auctions being actively participated by the spinners and mills.

The spinners and mills are eagerly awaiting the next TCP tender and in the meanwhile are purchasing modest lots from the ready market mostly at ginners’ options hoping that sale prices could be a balancing factor in line with their export parity levels after value-addition.

Official spot rates were again held unchanged at the overnight level of Rs2,425 per maund but some of the lots changed hands well above them.

New York cotton futures on the other hand remained under pressure and fell further by 0.56 and 0.41 cents per lb for both the ruling May and distant July contracts at 50.11 and 52.11, respectively.

Ready offtake was light totalling 2,000 bales as under: 1,000 bales, inter-mill deal at Rs2,460; and 400 bales, upper Sindh at Rs2,475.