June 11, 2006	Sunday	Jumadi-ul-Awwal 14, 1427

KARACHI, June 10: Physical activity on the cotton market on Saturday failed to pick up as ginners were not inclined to sell their stocks below Rs2,600 per maund on the perception that a price flare-up was imminent.

Floor brokers said that the buying strategy of spinners, therefore, signalled a major shift as some of them opted for average quality lint from the central Sindh ginners rather than chasing fine lots from the southern Punjab ginneries.

“Leading spinners are also eyeing Monday’s TCP auction for 30,000 bales before deciding how to react to the changed supply and demand scenario,” they said, adding “spinners’ major thrust is on local stuff as imports at this stage could be very expensive.”The developing situation on the demand and supply front reflects that both local and foreign buyers are expected to be actively participated in the TCP tender and indications are that the corporation could be the main beneficiary of the current price war.

“New York cotton futures currently ruling well above the benchmark of 50 cents per lb reflects that imports could be expensive at the prevailing prices and that is perhaps why there is no activity on this front,” ginners said.

According to market sources inter-mill activity appeared to be at its peak as leading spinners who were in comfortable supply position were selling surplus lint to their counterparts on cash or kind basis. Some of the private sector exporters had also joined hands as the local prices were higher than being offered by some of the importers, they said.

Meanwhile, market sources said the 13.8m bales crop target for 2006-07 was not that ambitious as a number of leading farmers opted to grow cotton this season owing to higher rates instead of sugarcane, which requires more water.

Reports reaching here from the major cotton growing areas of both the Sindh and Punjab cotton belts showed that the growth of the new crop was in line with the grower perceptions as the supply of irrigation water was normal barring some shortage in the tail-end areas of the Sindh belt.

After last couple of session’s persistent rise, New York cotton futures suffered a modest pruning, off 0.21 and 0.30 cents at 52.61 and 56.10 cents per lb for both the ruling July and the forward October settlements respectively.

Official spot rates on the other hand were firmly held at the previous level of Rs2,525, although some of the deals for inferior lots were done well below them.Ready off-take was light totalling 2,000 bales, 1,000 bales from Shahdadpur and Sanghar at Rs2,400 and 1,000 bales, Moro and Dadu at Rs2,600.