KARACHI, April 12: Cotton market on Saturday resisted fresh decline as a section of spinners resumed covering purchases hoping the resumption of normal foreign trade after the end of the Iraq war.

Spinners claim some of their traditional foreign trading partners, notably yarn importers from the Far Eastern countries including Japan have already indicated to open letters of credit for a sizable quantities.

Foreign trade has undergone a brief interruption as importers had held back their export orders fearing shipment problems owing to Iraq war.

But spinners say both the yarn and the cloth has become a bit expensive as compared to pre-war rates because of increase in freight rates and levy of war risk surcharge on consignments falling within the war zone.

However, talks between the sellers and buyers are claimed to be in the final stage to share the burden of additional levy and indications are that export shipments will get normal by the first week of the next month.

Floor brokers said the current slow down in mill buying despite a short crop was in part because of the fact that situation on the export front was not clear.

“We hope to clear the backlog of import orders on hold during the next couple of weeks as piling inventories have created liquidity problems for many of our members,” spinners said.

Meanwhile, reports coming from the local wholesale yarn market indicate that leading spinners are passing on in part the negative impact of the higher lint prices to the end product-users, most of whom are protesting against the increase.

However, further fall in polyester fibre prices used by the spinners to produce blended yarn and cloth for the foreign markets has modestly lower their production cost, making export a bit competitive.

It was perhaps in this background that official spot rates resisted fresh decline and were held unchanged, although in physical trading some of the fine lots were traded higher by Rs75 per maund.

New York cotton futures on the other hand posted fresh modest rise of 0.8 and 0.9 cents per lb at 58 and 59.77 cents per lb for both the ruling May and the forward July contracts respectively.

Ready offtake was moderately active totalling to 10,000 bales mostly big lots as under: 300 bales (seedstuff) Sanghar at Rs2,460, 500 bales, Khanpur at 2,500, 3,800 bales, Nurpur Nauranga at 2,550.00, 3,100 bales, Bahawalpur at 2,600.00 and 1,000 bales, at 2,575.00 and 1,000 bales, Ahmedpur East at 2,600.00.