KARACHI, Aug 28: Physical trading showed a modest expansion on the cotton market on Wednesday as leading spinners indulged in big-lot business to cover their forward sales of yarn and cloth.

Two big deals of 1,000 and 1,500 bales from Tando Adam and Mirpurkhas ginneries at around Rs2,100 per maund indicate that spinners have resumed normal market operations to fill in the supply gaps here and there.

The interesting feature is that prices seem to have stabilized between Rs2,050 and Rs2,100 per maund and an active business at these levels reflects that a consensus rate has been mutually agreed between the spinners and ginners at least for the near-term, one broker feels.

“But I don’t think the status quo could be maintained as ruling prices are generally guided by supply and demand factors rather than consensus rate,” he says.

However, one thing appears certain that after having tested the seasonal peak at Rs2,250 per maund early this month prices have almost stabilized above the benchmark of Rs2,000.

Market sources, however, claim the future price outlook will be determined after picking operations of phutti resume in the upper Sindh and the southern Punjab belts, the two major cotton producing areas, possibly in late October or early November.

Only 50 or odd ginning factories in lower and Central Sindh have so far resumed operations and together daily turnout about 5,000 bales, which are readily lifted by the Punjab and the Sindh spinners, keeping prices stable, they added.

How prices will behave after phutti starts arriving in ginneries throughout the cotton belt and their impact on the prevailing market conditions will set their future direction.

Some leading cotton brokers maintain as the crop could be in line with the official projections, there could be a remote possibility of any price flare-up in the coming weeks, although much will depend on extent of damage caused by pest attack in some of the areas in the Punjab cotton belt.

It was perhaps because of this fact that there was no change in the official spot rates but on the other hand New York cotton futures resisted fresh decline and ended partially recovered at 43.35 and 45.06, up 0.15 and 0.23 cents per lb for both the ruling October and the distant December settlements, respectively.

Ready offtake was active as till late in the evening about 5,000 bales from the Sindh ginneries changed hands as under: 1,000 bales of Tando Adam at Rs2,100; 1,500 bales, Mirpurkhas at Rs2,100; 200 bales, Sinjoro at Rs2,075; 200 bales, Sultanabad at Rs2,050; 200 bales, Khipro at Rs2,075; 200 bales, Kotri at Rs2,100; and 400 bales of Shahdadpur at Rs2,100.