KARACHI, July 19: Cotton prices remained stable on Saturday as picking operations of phutti in the lower Sindh belt remained suspended because of reports of fresh rain.

An air of optimism prevailed on the market over the new trade policy to be announced later in the evening as brokers hoped the textile sector may receive a major boost through fresh incentives to achieve the next year’s export target of $12bn. That will also give the needed push to spinners and mills to cover their forward positions on the export front.

Floor brokers said resumption of picking might not be possible before a week if the current spell of monsoon rain was over, and if it continued it could be further delayed.

“Owing to pressure on the ready supplies of both the current and the new crop, ginners have raised their asking prices,” they said. “Only those spinners who have made forward sales of cotton yarn appear to be in an obliging mood and are making stray purchases.”

Ginners from the lower Sindh cotton belt are not willing to sell new crop lint below Rs2,400 per muand, while those of the southern Punjab cotton belt or upper Sindh have raised their asking prices to Rs2,500 to Rs2,550 for the new crop.

However, despite being in a short supply, spinners are not indulging in panic selling and in a way are keeping check on speculative price flare-up, which now appears to be a strong possibility keeping in view of the supply and demand factors.

All eyes are now focused on the post-rain impact on the standing crop, notably the damage factor if any, which will determine the future price outlook, dealers said.

But a leading section of ginners is entertaining higher price ideas as the current heavy downpour in major cotton growing areas could work on both sides of standing crops as new plantations are still in a tender stage of growth.

However, it was satisfying to note that there is no negative manoeuvring either by the ginners or the spinners to sell the idea of a lower crop or pest attack during the post-rain weeks, they said.

That perhaps why the price increase is orderly and there were no signs of any speculative activity as both the sellers and the buyers are strictly following the normal business norms, they added.

Official spot rates were firmly held unchanged at the previous levels, although in the ready section some of the deals were done at much higher rates.

Ready business was slow as spinners awaited the announcement of the new trade policy and kept themselves to the sidelines. Some lots based on lower Sindh phutti and ginned by the central Punjab ginners changed hands as under: 300 bales, Burewala at Rs2,450.00 and 200 bales, Smandri at Rs2,515.