June 05, 2008	Thursday	Jamadi-ul-Awwal 30, 1429

KARACHI, June 4: Physical activity on the cotton market on Wednesday remained slow as ginners and spinners were locked in a price war but it appears to be a no-win situation for the both. But some analysts said the current fall in New York cotton futures below 70 cents per lb level could have negative impact on the local prices, which are ruling high.

“Spinners and mills are watching the persistent fall in the world cotton prices and may opt for fresh imports to build up long positions for the next season as they are very skeptical about the new crop owing to shortage of irrigation water at the time of sowing,” they added.

They said world prices are progressively falling in line with the parity levels of spinners but they may enter the market around 60 cents per lb.

“Fresh import of lint, irrespective of the price fall, is essentially dependent on the textile export,” they said and added: “World textile market has picked up slowly during the last quarter of the current fiscal year and we have enough stocks to meet fresh demand during the first quarter of the next year and by that time local crop will also be available.”

But ginners said the prevailing local prices are guided by the supply and demand factor and are not linked at this stage to international parity levels and may continue to rule firm before the arrival of the new crop.

According to them unsold stocks with some of the leading ginners may be around 200,000 bales, which spinners could buy in a day if they want to grab the floating stock.

New York cotton futures fell further by 1.23 and 1.47 cents per lb at 64.21 and 69.28 cents per lb for both the ruling new crop July and Octobers contracts, respectively.But on the other hand there was no change in the official spot rates, which were held unchanged at Rs3,700 per maund.

Ready off-take was light as only 400 bales from upper Sindh ginneries changed hands at Rs3,800 per maund.