May 04, 2008	Sunday	Rabi-us-Sani 27, 1429

KARACHI, May 3: Cotton prices eased on Saturday from the previous levels as some of the ginners lowered their asking prices for inferior type to clear the backlog.

But mill demand remained on the lower side as spinners claimed pressure on their liquidity positions because their US buyers were holding back the payment of about Rs2 billion against about two dozen consignments of textiles goods for various reasons, market sources said.

But analysts said the future price outlook appears to be a bit bullish as the unsold stocks of lint had fallen to a meager 0.3m bales and a modest rebound staged by the New York cotton futures.

According to final official arrival figures of phutti released by the Pakistan Cotton Ginners Association (PCGA) up to May 1, totaled 11.3 million bales, which are 1.1 million bales lower as compared to last year’s total on the same date, they said.

However, larger imports of lint from various sources of well over 3 million bales to make up the local crop shortage seem to have stabilised prices on the local market sans any speculative price flare-up. The highest rates touched by Rs3,600 per maund, they said. But they predict the new crop, sowing for which has just been resumed, could be much expensive because of higher cost of inputs, notably fertiliser and pesticides.That is perhaps why some of the spinners are making forward deals for the new crop at Rs3,700 per maund, some others said.

Meanwhile, reports reaching here from the lower Sindh cotton belt indicate that though a bit delayed the sowing of the new crop is well in progress as the supply of irrigation water has improved.

Official spot rates were revised downward by Rs25 per maund at Rs3,350.

Ready off-take was light as only 200 bales from a Shahdadpur ginnery changed hands at Rs3,375.