July 20, 2007	Friday	Rajab 04, 1428

KARACHI, July 19: Cotton market on Thursday maintained a firm outlook as pressure on supplies kept prices on the higher side amid light trading. Market sources said the mill demand was expected to pick up in the coming weeks as the new trade policy had offered a number of incentives to the textile sector for boosting exports.

Leading spinners and mills are still in the process of analysing details of the incentive package before resuming their normal trading activity, they said.

But some others said the incentives may not have any relevance to the ground situation in the backdrop of both local and foreign higher prices, the situation could change significantly after the supply position showed an improvement.

Spinners said the higher local prices was progressively eroding their competitiveness on the world textile market and in the absence of normal export, stocks of cotton yarn and cloth were piling in their godowns.

Moreover yarn prices, which rise modestly in line with price flare-up in cotton prices, are still below their parity levels but they keep moving the wheels for a better time.

But their weaker links, notably those who operate on daily basis are in trouble as higher prices have forced them to cut their production target, they said.

New York cotton futures recovered from the overnight lows and were quoted higher by 0.84 and 0.69 cents per lb at 64.45 and 66.39 cents for both the ruling October and the distant December settlements respectively.

Local official spot rates were firmly held unchanged at Rs2,900 per maund.

Mill ready offtake was light totalling about 1,000 bales, the following being some of the notable deals: 200 bales, each Sahiwal and Burewala at Rs3,150 and 100 bales, Pakpattan at Rs3,125.