June 28, 2006	Wednesday	Jumadi-ul-Sani 1, 1427

KARACHI, June 27: The cotton market on Tuesday maintained a firm outlook but physical activity remained at low ebb, as ginners were not inclined to lower their asking prices for fine lots which spinners claim are a bit higher than their export parity levels.

The recent reports of rain in major cotton growing areas are beneficial for new crop tender plants, notably in the central Sindh cotton belt, but it may have damaged the quality of phutti in lower Sindh where the crop is said to be in the picking stage.

Picking operations of phutti may also be delayed owing to wet fields and until they dried up the operations may remain suspended if there no fresh rain, ginners said.

On the TCP tender front, some of the leading spinner groups also turned out to be successful bidders for modest lots from the TCP, as their bids were accepted against the tender for 33,000 bales opened on June 26, dealers said.

But both the spinners and mills still need more supplies before the arrival of the new crop from lower Sindh ginneries to see the current cotton year ending Aug 31, they said. The delayed new and below target crops are said to be one of the chief reasons behind the current price run-up, they added.

However, stray lots did change hands as some of the spinners managed to buy low-mic lots from central Sindh ginners, as those from upper Sindh and southern Punjab held on to their unsold positions rather than selling below their asking prices, some others said.

According to market sources, the leading spinners and mills had already completed their physical shipments for the fiscal year ending June 30, and new year shipments were expected to resume by the next month for the next quarter.

Local off-take of cotton yarn by the end product users, spinners said, was on the higher side as some of the leading users build up long positions at the current level fearing further rise in prices, they added.

Official spot rates were, therefore, again held unchanged at Rs2,600 per maund in the absence of positive feedback from the ready section.

New York cotton future turned mixed. While the matured July contract rose by 1.46 cents per lab at 47.76 cents, the ruling October settlement fell by 0.63 cents at 51.48 cents per lb, respectively.

Ready off-take was light totalling 2,500 bales, mostly from the central Sindh ginners and most of the deals were finalized below Rs2,600 per maund, the highest being Rs2,550.