February 29, 2008	Friday	Safar 21, 1429

KARACHI, Feb 28: Active trading was witnessed on the cotton market on Thursday as spinners and mills resumed their normal covering operations fearing a further increase in prices.

About 20,000 bales, both from the Sindh and the Punjab cotton belts, changed hands between Rs3,200 and Rs3,400 per maund depending on the quality of lint in trade, floor brokers said.

But major emphasis of the spinners was on fine lots which they need to honour their export commitments for high quality yarn and cloth, but ginners are not inclined to sell it below Rs3,400 or above per maund, they said.

Even inferior lots held by some of the ginners are also showing comparative increase in prices in line with their superior lots, an average rate being Rs3,200 per maund, they said.

The recent price flare-up on the New York Cotton Exchange on speculative support aided by fears of a short production in some of the leading producing countries, notably Pakistan, has altogether changed the world cotton look creating problems for exporters of end-product producers, said a spinner.

The tragic side of the price flare-up is that prices of textiles are not showing comparative increase as leading importers are not inclined to open L/Cs to compensate for the rise in lint prices, he said, adding the standoff had slowed down export of textiles.

“What worries most of us is the perception that it may not be that easy to contain prices of lint within the current level for obvious reasons linked with supply and demand,” some other spinners said.

The other negative development is that some of the exporters of lint may not honour their commitments after the steep increase in world prices, they added.

Official spot rates were, therefore, firmly held at the overnight level of Rs3,200 per maund for an average quality of lint.

The following are some of the deals, which went through the ready section:

SINDH TYPE: 2,400 bales, upper Sindh at Rs3,340 to Rs3,400; 1,000 bales, Setharja, 400 bales, Kumb and 500 bales, Khipro at Rs3,300.

PUNJAB VARIETY: 5,000 bales, Sadiqabad at Rs3,200 to Rs3,225, 5,000 bales, Rahimyar Khan at Rs3,200 to Rs3,300, 1,000 bales, Liaquatpur at Rs3,200 and 1,000 bales, Haroonabad at Rs3,150 to Rs3,175.