KARACHI, Feb 12: Cotton market on Tuesday showed firm trend as ginners held on to their positions, anticipating an increase in prices after the Trading Corporation of Pakistan resumes supporting operations.

The government’s directive to the TCP to purchase one million bales from ginners to support the falling lint prices seems to have sent a wave of an optimism among ginners at least for the near-term.

Under the official directive, the TCP will purchase lint from ginners at the prevailing spot rates being fixed daily by a representative rate committee for grade 111, which are much higher than the rates at which physical business is currently being transacted, dealers said.

Whether or not phutti prices will also rise in sympathy with lint is not clear, although growers still holding unsold stocks hope so.

According to market sources some of the prominent growers are holding large stocks of phutti and did not sell them at the falling prices hoping for a turnaround.

After the initial euphoria about the positive impact of the TCP market intervention is over, most ginners will come to the conclusion that it is not that easy to meet its technical demands and consequently to sell the surplus stocks, they added.

“What worries ginners are the reports about the delayed payments and their failure to meet the bank demands well in time,” says a broker, adding “smaller ginners will opt for selling to mills, but on cash basis to save themselves from the procedural problems.”

However, leading ginners will certainly benefit after entry of the TCP as they have both the capacity to received payments a bit late and the manpower to perform the job.

As a result, there was a relative quiet ahead of the resumption of purchasing operations by the TCP as sellers awaited fresh developments on the cotton trade before opting for selling.

Floor brokers predict the market could move either-way depending counter moves from the spinners to keep prices within the current range, claimed to be suited to their yarn export parity levels.

But much will depend on the holding capacity of the ginners and spinners moves whether or not to resume panic buying.

The spinners, who still needs a substantial quantity of fine lots, have already raised their purchasing prices fearing further rise and for the first time after several sessions a deal was finalized at Rs1,690 as compared to previous Rs1,550 to Rs1,600.

As a result, ready offtake was light totalling about 4,000 bales as under:

SINDH TYPE: 1,100 bales of Hingoja at Rs1,690 and 400 bales of Setharja at Rs1,550.