June 23, 2006	Friday	Jumadi-ul-Awwal 26, 1427

KARACHI, June 22: Cotton market on Thursday consolidated overnight gains but trading activity shrank after spinners and mills reduced their ready buying at the higher asking prices.

The interesting feature was that the market witnessed a major change in the buying strategy of mills as leading among them opted for the central Sindh lint, being offered at much lower rates as compared to its southern Punjab counterpart, brokers said.

Stray lots from the central Sindh cotton belt changed hands below Rs2,600 per maund depending on quality of the lot in trade. It would be used to spin lower counts of cotton yarn for the local end-product users and some of the foreign buyers.

Spinners say buying above the Rs2,600.00 per maund level upsets their export parity level in a highly volatile world textile market. Until there is pick up in finished textiles on the world markets, their ready off-take may remain modest.

Moreover, leading among them are awaiting the opening of bids against the TCP tender for 33,000 bales on June 26. It was speculated that the final tender price set the future market trend based on grade prices.

Market sources said leading spinners are inclined to go for the entire TCP stock even at the higher prices as in their opinion it could well prove a price stabiliser on the local market at least for the near-term.

Owing to the falling prices on the world markets, spinners hope that benchmark prices to be set by the TCP are expected to be on the lower side in line with the world rates in apparent effort to accommodated foreign buyers, they added.

It was in this background that the official spot rates were firmly held at the last levels and some of the deals in the ready section were done around them.

New York cotton futures on the other hand came in for renewed selling and were marked down by 0.21 and 0.03 cents per lb for both the maturing July and the distant October settlements at 50.89 and 54.73 cents per lb respectively.

Ready business was light totalling about 2,500 bales, all from the Sindh ginneries as under: 800 bales, Bucheri at Rs2,525.00, 400 bales, Shahdadpur at Rs2,575, 800 bales, Nawabshah at Rs2,540 and 300 bales, Tando Adam, (B.T variety) at Rs2,650.