May 23, 2006	Tuesday	Rabi-us-Sani 24, 1427

KARACHI, May 22: Trading on the cotton market on Monday resumed on a higher note but physical business remained light as ginners were not inclined to lower their asking prices leading to a standoff on the price front.

As a result, some fine lots from the southern Punjab ginneries were sold at the seasonal peak level of Rs2,550 per maund, as a leading spinner group purchased a big lot of 3,000 bales, brokers said.

They said falling unsold stocks with the ginners are fuelling the current price flare-up and spinners and mills fears they may face some problems on the export front during the remaining month of the current quarter ending June 30, 2006.

Most of the forward deals for the current quarter were signed in last March based on the lint prices at that time, which were around Rs2,350 per maund but the current average rate at around Rs2,500 leaves a gap of Rs150, pretty hard to be filled in, they added.

But some ginners say the increase in prices may cut spinners profits at the current prices but in no way would hurt their export competitiveness. Moreover, there is always a price adjustment in case the local price fall or rise as stipulated in the export deals, they added.

Most of spinners are now awaiting the next sale tender of lint by the TCP, while some others are eyeing the arrival of new crop, against which some forward deals are being signed between the mills and lower Sindh ginners.

Meanwhile, reports coming from the lower Sindh cotton belt indicate that picking operations of phutti has resumed but growers are holding back the stock in apparent to sell it at higher rates, market sources said.

New crop from Sindh is generally sold well above the official support price in the beginning depending on supply and demand as well as quality, they added.

Official spot rates were, therefore, firmly held at the last level of Rs2,425 per maund but in the ready section some of the lots changed hands at Rs2,550.

Ready offtake was modest totalling about 4,000 bales as under: 3,000 bales, Khanpur at Rs2,550; and 300 bales, Feroza at Rs2,450.