June 09, 2007	Saturday	Jamadi-ul-Awwal 23, 1428

KARACHI, June 8: Pre-budget cautious trading mood prevailed on the cotton market on Friday as leading spinners and mills did not make fresh larger commitments awaiting the details of much-delayed textile package.

The widely speculated textile package, spinners claim, is expected to be announced along with the new budget on Saturday, which will allow them to plan on long-term basis both on the home and export fronts, market sources said.

They said the new budget may not solve all the problems being faced by the textile sector in the backdrop of a short cotton crop and higher prices.

The budget is expected to set future export pattern for them by giving a number of incentives and tax relief, which will enable them to lower their production and become competitive on the export front, they added.

Floor brokers said mills’ buying has been on the lower side of the daily average despite higher unsold stocks lying at the ginners godowns owing to some problems on the export front, including lower prices being offered by the importers of textile.

The fact that local spinners still have an unsold stock of 0.150m bales, mostly of fine lots tells that spinners and mills are weighed down by some other considerations rather than supply and demand, they said.

“One of them may be higher asking prices for the fine lots by the ginners, which significantly affected their export parity levels in foreign markets already facing a textile glut,” said a leading spinner.

The New York cotton futures resisted fresh fall and recovered from the overnight lows, up by 0.21 and 0.15 cents per lb at 51.76 and 55.20 cents for both the ruling July and the new crop October contracts, respectively.

There was, therefore, no change in the official spot rates, which were quoted unchanged at the overnight level of Rs2,600 per maund.

But fine lots on the ready counter were traded higher at Rs2,625, which included 400 bales of Shujaabad and 100 bales pertained to inter-mill deals.