KARACHI, Aug 8: Cotton prices on Friday showed a modest increase as mills and spinners tried to grab the floating stock of the new crop from the Sindh ginners.

Most of the deals in new crop Sindh variety were finalized around an average rate of Rs2,500 per maund, which showed an increase of Rs25 per maund over the overnight prices, brokers said.

They said reports coming from the lower Sindh and some parts of the central Sindh cotton belt indicate that both the picking operations of phutti and ginning are still far below the normal levels.

Reports of fresh rain in some of the cotton growing areas forced growers to suspend picking operations as wet fields and the moisture caused by the rain damages the quality of the lint at the ginning stage.

“New crop lint is in short supply, which in turn has caused the current increase in prices,” brokers said adding “until arrivals of phutti into the ginneries get normal, prices may rise further.”

While the leading spinner groups are not worried over the pressure on the ready supplies as they had built up long positions earlier in the last season, small groups facing some financial constraints are feeling the pinch of the short supply, they said.

“Import orders for textiles are pouring in each day from the foreign buyers but uncertain supply position and higher lint rates are hindering forward deals for a substantial quality of both yarn and cloth,” spinners said.

Market sources said supply position of new crop lint may remained uncertain until the current spell of rain ends and normal ginning and picking operations resume.

Meanwhile, New York cotton futures failed to sustain the overnight run-up and came in for renewed speculative selling. The ruling October settlement fell by 1 cent and the forward December by 1.17 cents per lb at 56.40, and 57.68 cents per lb respectively.

Local official spot rates for the old crop, however, did not show any change and were firmly held at the last levels.

Ready business was light as till late in the evening about 2,000 bales of new crop from the Sindh ginneries changed hands as under: 200 bales, Sultanabad at Rs2,475 and 200 bales at Rs2,500, 200 bales, Mirpurkhas at Rs2,475, 200 bales each from Kot Ghulam Muhammad and Shahdadpur at Rs2,500.