KARACHI, Jan 21: Cotton prices on Tuesday rose sharply as spinners indulged in near-panic buying but ginners held on to their positions entertaining bullish ideas owing to conflicting reports about the size of the crop.

Some of the deals in physical trading were finalized at Rs2,300 per maund, what the dealers called highest rate of the season and predicted further increase in prices.

The fears of a short crop dominated the trading throughout the session as spinners and leading mills were out to grab the floating stock irrespective of the asking prices. Some of them managed to purchase about 15,000 bales at the season’s peak level.

Below market expectations arrivals of phutti into the ginneries worried spinners and mills followed by market talk of a short crop despite rumours that some of the leading growers are holding on phutti stocks to sell them at higher rates.

However, spinners did not sit idle after the release of figures by the Pakistan Cotton Ginners Association and made enquiries about the size of the crop, which was not that encouraging. Hence panic buying, dealers said.

“We need 12.5m bales to meet our annual consumption demand”, claims a leading spinner “but the total supplies may not touch the high mark of 11m bales even if the current reports of 10.5m bales is taken a benchmark”.

Brokers claim the local prices are still lower as compared to the world rates, which are being quoted above 50 cents per lb and spinners have realized the developing phenomenon on the cotton front and are out to cover their forward positions.

But the sailing on the market may not be that smooth as ginners are well-informed about the world cotton scene in the backdrop of crop shortfall in the major producing countries including China, the US and India and may not lower their asking prices.

Most cotton analysts fear some problems on the textile export front as the end-products meant for export markets will be expensive in line with the lint prices.

The increase in textile exports during the first six months of the current fiscal, they fear, may be interrupted if the current crop fall short of the local mill demand.

As a result, leading spinners entered the market in a big way and lift all the lots offered for sale but ginners appear to be in no obliging mood and stayed out as was reflected by light ready offtake.

The official spot rates were marked up by Rs10 per maund but in the ready section some of the deals were done higher by Rs140 per maund.

Ready business was modest and confined to fine lots from the Punjab ginneries as under: 8,000 bales, Rahimyar Khan at Rs2,290 and 5,000 bales, Bahawalpur at Rs2,300.