KARACHI, Feb 10: Cotton market finished pre-Eid holiday session on a firm note as ginners held on to their positions amid predictions of further increase in prices.

Mill demand was also at a low ebb as leading spinners kept to the sidelines owing to delivery problems ahead of Eid holidays and hopes of decline in prices.

Stray lots, however, did change hands but mostly on credit basis involving delivery after two months at much higher rates.

Floor brokers said some of the leading spinners who have firm export orders have started offering higher prices to ginners for fine lots apparently in an attempt to cover their forward positions against cotton yarn.

“A big forward deal of 2,000 bales at Rs2,420 per maund as compared to TCP’s Rs2,459 per 40 kg for contamination-free lint, reflects that prices war has already started,” they said.

But TCP highups may not be in a hurry to enter a price war with the spinners as their sphere of activity is confined to few selected ginneries from which they are obliged to lift stocks under an agreement.

But market sources fear the TCP’s entry though may be selective but it will certainly have positive impact on the prevailing prices on the open market in the post-Eid holiday trading sessions.

An added to it will be whispering of a short crop and fears about the pressure on the future supplies of lint may push prices further higher, they added.

“The cotton situation is getting terribly disturbing and the prevailing confusion in the textile sector indicates exports may be affected, which had shown an increase of 19.2 per cent during the first of the current fiscal,” says a leading spinner.

Meanwhile, some of the spinners have already imported about 0.280 bales of long staple lint from various sources to produce blended fabrics and yarn for export markets up to Feb 1, since last September and an identical quantity is claimed to be in the pipeline.

According to reports reaching here from the southern Punjab ginneries some of the growers have raised phutti rates in line with lint, fine quality on an average is being sold around Rs1,025 per 40 kg.

Official spot rates did not show any change and were firmly held at the weekend levels but in the ready section some of the deals were done well above them.

Ready offtake was light as till late in the evening about 3,000 bales changed hands, the following being some of the notable deals: 400 bales, Bucheri at Rs2,325 and 2,000 bales, Mandodaro at Rs2,420 on two-month credit.