June 13, 2008	Friday	Jamadi-us-Sani 08, 1429

KARACHI, June 12: Cotton prices on Thursday soared to a new record high of Rs4,100 per maund but the flare-up is not linked to any of the fiscal measures in the new national budget but is linked with supply and demand factors, analyst Naseem Usman said.

He said cotton trade is linked with the textile sector and as the new budget is silent on the relief to this sector, so there is no immediate positive impact on the market.

But some others said the subsidy of Rs1,000 per bag on DAP fertiliser and import duty cut on pesticides would certainly support the farm sector in the form of lower input costs.

“The farmers are expected to benefit from the DAP fertiliser subsidy, which in turn will lead to a healthy crop after an improved application of fertiliser,” they added.

The steep rise of Rs100 in the lint price to Rs4,100 reflects that a section of spinners fully booked for the next quarter of the new fiscal is out to grab the floating stock of about 40,000 bales of the current crop, floor brokers said.

But some others attributed the increase to limit-gain in the New York cotton futures, which soared by 3 cents and 2.16 cents per lb at 69.25 cents and 72.75 cents for both the ruling July and the forward October settlements, respectively, on reports of damage to standing crop owing to heavy rains.

Indications are that prices would move further higher in the coming weeks as new crop may not arrive in number before early August, they said, adding forward deals for stray lots may not influence rates on the lower side.

Official spot rates, however, did not show any change and were firmly held at Rs3,800 per maund.

Apart from 400 bales from a Ghotki ginnery, sold at Rs4,100 per maund, mills ready off-take was on the lower side. An exporter, however, sold another 400 bales to a spinner at Rs3,700.