During the week under report the activities on the local market were calm subject to seasonal influences.

Resuming after holidays, merchants in most parts of the country registered just few enquiries indicating that mills observe the development of prices closely.

There exists at present apparently more interest for long and extra long staple than for Upland cotton; the turnovers however remained on a low level.

In the Upland range were traded: West African types for prompt respectively right after the works holidays; Central Asian sorts for prompt and for the 1st quarter 2006; Sudan Acala cotton for prompt.

Contracts in the long and extra long staple sector were reported as follows: Egyptian GIZA 70 for prompt and USA Pima for shipment in the 1st and 2nd quarter 2006.

Meanwhile, the German cotton spinning registered a sharp drop of 9.3 percent in June output enen as weaving is going through another period of a reduction in output.

This is reflected through reduced demand in the domestic weaving and knitting sectors.

Cotton yarn exports have showed signs of weakening in the traditional European destinations like Spain, which sank by 44.7 percent in the first four months of 2005.

Germany is replaced by India as top supplier to the remaining Spanish weavers and knitters.

German cotton yarn exports to Italy declined 28.6 percent in the first quarter. A major volume of cotton yarn exports now shifts to the Czech Republic to satisfy demand from German firms that have moved to outsource fabric output in that country.

Consequently, the Europa Index of Cotton Spinning (2000=100, Seasonally Adjusted), June cotton yarn output fell to 66.6.

This is 9.3 percent year-on-year decline, which was the steepest one-month decline in output, experienced in 2005.

German cotton weaving production dropped 9.4 percent in June, apparel production slid 16.3 percent, underwear output declined 15.5 percent and knit/crocheted fabric production sank 11.8 percent.

As for the specialty areas that more and more German textile firms are turning to; flax yarn production rose 8.4 percent in the first half of 2005. Alongwith man-made fiber industrial textiles, finishing of textiles showed parallel growth.