KARACHI, June 15: Cotton prices on Tuesday suffered a modest decline of Rs25 per maund in the absence of any buying offers from the spinners and the mills. Brokers said spinners were still in the process of analyzing the positive impact of fiscal reliefs given to the textile sector in the federal budget and were expected to be back in the market during the next couple of days.

They said ginners, who were holding a meagre unsold stock of 0.450m bales, were also not in a hurry and held on to their positions without getting panicky. Both the ginners and spinners were busy in determining the selling price of lint after the withdrawal of the 15 per cent sales tax on the ginned cotton and that factor may have negative impact on the ready business.

"Spinners will prefer the local stuff both price and quality-wise", ginners said adding "our holding capacity is strong and we could wait amid hopes that spinners and mills will be back in the market during the next couple of sessions".

Owing to a steady increase in the textile exports during the current financial year, mills monthly average intake has risen to 0.950m bales and the unsold stock with ginners is about two weeks tally.

An increase in polyester fibre prices did worry spinners as it could add to their input cost for the blended fabrics or yarn being produced both for the local and foreign markets.

Brokers said of late, the blending ratio of polyester fibre has risen to 35 to 40 per cent from the previous 25 to 30 per cent, which in turn caused price flare-up of Rs5 per kg during the last about three months after successive increase by the producers.

However, spinners were not opting for panic-buying to keep prices within the prevailing rates and were playing hide-and-seek game with the ginners for the last couple of weeks.

Opinions were divided over the unsold stocks with the ginners. Some said the stocks of fine lots had almost been exhausted, while others claimed that the ginners had already sold their inferior lots and were holding on to finer ones for a better price.

Physical business remained on the lower side, although reports coming in from the southern Punjab cotton belt indicated that stray lots did change hands around Rs3,100 per maund.

New York cotton futures on Monday ended lower by 0.85 and 1.10 cents per lb at 57.32 and 57.50 for both the ruling July and the new crop October contracts respectively. fficial spot rates were lowered by Rs25 per maund at Rs3,050 in line with quality factors.