KARACHI, May 29: Cotton market on Wednesday maintained a firm outlook as ginners held on to their positions anticipating an increase in prices in the coming sessions in response to bullish trend on the world trading centres.

An idea of higher price outlook may well be had from the fact that a big lot of quality lint was sold at Rs1,800 per maund without 15 per cent sales tax.

“The steep increase in New York cotton futures has altogether changed the world cotton outlook”, a leading ginner claim “the lint is becoming more expensive owing to its wider use in Europe and the US”.

Unlike the previous seasons, the consumption of clothes made of cotton has significantly increased during the current summer and in turn consumption of lint cotton in the same proportions, having a positive impact on the prices, he says.

The forward October contract rose to seasonal peak level of above 40 cents per lb, while the ruling July also rose by a limit-gain of 0.131 cents per lb at 38.25 cents per lb.

For the first time during the current season, any New York cotton future contract has touched the high mark of 40 cents. During the last several months both the contracts have been fluctuating between 30 cents on the lower side and 36 cents per lb on the higher side.

Floor brokers predict in due course, local lint prices are also expected to show sympathetic increase and that will benefit those ginners who may hold on to their unsold stocks.

But there could be some problems for the exporters as any increase in the local prices will erode their competitive edge on the international market but those who have already covered their positions against forward sales could get a fair return on their investment, they added.

But market sources said any possible sympathetic increase in local prices will largely depend on the size of the final unsold stock lying with the ginners and their holding capacity during the next couple of months.

The arrival of new crop from the lower Sindh cotton belt possibly by the end of next month or early July and its size as well as the prices of phutti will determine its selling price. However, any increase will be definitely reflected in the old crop rates.

Meanwhile, the TCP has reported sale contracts for another 400 bales at Rs1,550 per maund, signalling its presence on the market.

It was perhaps in this background that there was no change in the official spot rates for the third session in a row.

Ready offtake was light as till late in the evening about 3,000 bales changed hands all from the Punjab ginneries as under: 600 bales, Burewala at Rs1,500, 500 bales, D.G. Khan at Rs1,650 and a fine lot of 1,000 bales from Bagh-O-Bahar at Rs1,800.