KARACHI, May 6: Cheerless trading conditions were witnessed on the cotton market on Tuesday as both spinners and mills again kept to the sidelines anticipating further decline in world prices.

The fresh sharp decline in New York cotton futures has reinforced the spinners’ perception about future price outlook and they preferred to keep off the market rather than buying local lint.

“The fresh decline in New York cotton futures has made imports more competitive”, says a leading spinner adding “our price target below 50 cents per pound now may not be that far off”.

For the last couple of sessions, spinners have virtually withdrawn themselves from the local market amid predictions that world prices are expected to hit new lows owing to steep decline in the consumption needs of major users such as Hong Kong and China because of SARS virus.

Owing to falling demand, New York cotton futures had fallen from the 15-year peak of 60 cents per lb to 52.25 and 53.92 cents per lb for both the ruling May and the distant July settlements, off 1.85 and 1.58 cents per lb respectively.

It is speculated here by local spinners irrespective of the holding capacity of the ginners, prices are bound to fall in line with the world rates during the next couple of weeks.

“We have curtailed our daily intake from the local market as ginners are not inclined to lower their asking prices in line with the international ones”, spinners claim “We have to keep in mind our export parity level for yarn and cloth before buying local lint”.

Ginners are reluctant to sell their stocks below Rs 2,550 per maund, and contamination-free lots from the upper Sindh and southern Punjab ginneries below Rs2,600. Hence the standoff in daily business despite modest unsold stocks.

Brokers said it went to the credit of spinners who did not allow ginners to benefit from a short crop after making tactical moves keeping them at their toes all the time.

On the export front, private sector exporters sold 2,464 bales more to Indonesia and Bangladesh, the total foreign sales so far being 0.184m bales, including 54,148 bales from the old crop.

Official spot rates remained pegged at previous levels in the absence of any ready business, although quality premiums were maintained in line with the staple length.