KARACHI, Aug 22: Cotton prices on Thursday remained stable as some of the spinners continued to cover their positions but the physical activity remained relatively slow owing to the absence of leading mills.

For the second session in a row, the market was guided by the local fundamentals rather than bearish advices from the New York Cotton Exchange where the forward contracts remained under pressure on speculative selling.

New York cotton futures finished further lower by 0.65 and 0.85 cents per lb at 43.05 and 44.44 cents per lb for both the ruling October and the distant December settlements, sending bearish signals elsewhere.

“Unlike the previous sessions, local market followed the lead of supply and demand factors rather than the overseas signals”, says a leading broker “I don’t think any external negative news could influence prices”.

He said the interesting feature is that mill demand is rising by each day as owing to higher consumption figures both spinners and mills are feeling the pinch of falling inventories.

Cotton analysts said the monthly mill consumption of lint cotton has risen from the last year’s average figure of 0.750m to 0.850m bales during the current season as 100 and odd sick mills have resumed commercial operations.

After having consumed bulk of the local production of 10.5m bales, as well as the imported stuff of about 1.3m bales, spinners are now after the new crop and trying to grab as many bales as they could at current levels and that is perhaps why prices have rebounded to Rs2,200 after having fallen to Rs2,000 per maund last week.

Floor brokers said reports of a damage to standing crop in the central Punjab cotton belt is also aiding the current price flare-up as spinners fear pressure on supplies if the crop is damaged above the economic injury level.

Moreover, reports of holding back of phutti stocks by the growers in the lower Sindh cotton belt is also fuelling the current increase in prices, they added.

Meanwhile, information available from the Export Promotion Bureau (EPB) indicates that both the private sector and the TCP has registered export contracts with it for 4,392 bales, private sector 2,264 bales and the TCP 2,128 bales sold to Indonesia and Bangladesh.

Official spot rates were quoted further higher by Rs25 to Rs2,075 per maund but in physical trading most of the deals were finalized above them.

Ready business was light as till late in the evening about 1,500 bales changed hands, the following being some of the notable deals: 200 bales, Kot Ghulam Muhammad at Rs2,200, 200 bales, Tando Adam at Rs2,175 and 400 bales, Sanghar also at Rs2,175.