KARACHI, July 28: Firm conditions prevailed on the cotton market on Monday as prices of new crop were quoted further higher amid fears of short supply. Trading was slow because of afternoon cloud heavy downpour.

Reports of damage to the standing crop in some of the areas in the lower Sindh cotton belt owing to rain seems to be the chief stabilizing factor behind the current bullish price outlook, dealers said.

Some cotton specialists fear that post-rain cotton crop could face the threat of pest breeding as well as greater amount of moisture in the fibre content if the current rain spell continues for another week or two.

That could well mean a lower micronaire creating allied problems for the spinning as well as weaving industry, they said.

Conflicting reports about the damage are coming in each day from the cotton belt, which keep spinners and mills at their toes all the time and they are out to floating stock of both the current and old crops irrespective of higher asking prices, they said.

They said as there is a pressure on ready supplies prices are rising daily. Spinners are buyers for the fine lots of the current crop at Rs2,600 per maund, while the new crop lint from the lower Sindh is selling at a discount of Rs50 per maund.

Floor brokers said in normal trading conditions when there is no pressure on ready supplies, the difference between the short staple and the medium staple fluctuate between Rs100 and Rs150 depending on the quality of lint in trade.

But in the absence of sufficient ready stocks, the price differential between the two is at a record low as spinners have no option but to keep the wheels moving after having purchased the available lint, they said.

Ginners claim they are in no mood to exploit the situation. In the absence of arrivals of phutti into to the ginneries followed by suspension of picking operations of phutti, they are not in a position to meet the demand of the textile industry until the cotton trade gets normal.

A ready business of a couple of lots reflects the supply position and its impact on the prevailing prices and its impact on the prices.

Official spot rates for the current crop were upped by Rs15 per maund, although they are sharply lower than the prevailing new crop prices.

Ready offtake was light as till late in the evening about 300 bales from Mirpurkhas and Sultanabad ginneries changed hands around Rs2,450 to Rs2,500.