May 24, 2006	Wednesday	Rabi-us-Sani 25, 1427

KARACHI, May 23: Forward trading in new cotton crop from a lower Sindh ginnery was resumed on Tuesday as some of the spinners needing supplies in the new financial year signed a deal with the ginners.

According to a leading broker a deal for 200 bales from a Mirpurkhas ginnery was signed around the prevailing rate of Rs2,500 per maund for delivery on Aug 15.

He said that some of the spinners and mills were seeking new crop supplies during the next financial year amid reports of another below target short crop which indicated that prices may stay on the higher side because of increasing mill demand and fears about pressure on future supplies.

The forward deal showed that most of the ginneries in the lower Sindh cotton belt were expected to resume ginning operations by the middle of July and deliveries against the forward deals would start from Aug 15.

But market sources said that some of the ginners would try to advance the delivery date late July or early August to get a better price for their newly ginned lots.

However, prices are expected to stay on the higher side well above the current level of Rs2,500 as supply gap between the unsold stocks of the current crop with the ginners and the new one is about two months, they said.

It is interesting to note that mills’ monthly intake has touched the high mark of a million bales plus and some of the mills having modest holding capacity may have to pay a bit more for the new crop supplies.

Reports coming from the world markets indicate that demand for the lint is not picking up in the absence of leading buyers including China. As a result, New York cotton futures fell further by 0.19 and 0.15 cents per lb at 49.17 and 52.25 cents for both the ruling July and the distant October settlements.

Local official rates on the other hand did not show any change and were quoted around the previous level of Rs2,425, although stray lots changed hands well above them.

Ready off-take was light totalling 2,000 bales including 500 bales, Rajanpur at Rs2,500.