KARACHI, Oct 7: Cotton prices on Tuesday rose further as spinners continued to make panic buying despite official reports that production target of 10.5m bales could be met despite pest attack in some of the major growing areas of the southern Punjab.

Having their own crop monitoring teams, spinners and mills were not inclined to stay on the sidelines awaiting fall in prices and lifted all the lots offered for sale by the ginners.

“An idea of panic-buying by mills may well be had from the fact that both the Sindh and the Punjab varieties were sold at uniform rate of Rs2,700 per maund without 15 per cent sales tax”, brokers said “after adding 15 per cent sales tax, the total comes to Rs3,224 per 40 kg, well above the world rates”.

But late in the evening a couple of fine lots were sold at Rs2,750 per maund, indicating prices could rise further during the next couple of days if spinners continued to indulge in panic buying.

Most of the deals in the ready section were done Rs50 per maund higher as compared to overnight rates.

New York cotton futures on Monday also maintained their upward drive followed by reports of global shortage of the commodity in the major producing countries and consequent pressure on supplies.

New York cotton futures on Monday were quoted higher by 1 and 1.16 cents per lb at 67.40 and 68.49 cents per lb for both the maturing October and the forward December contracts respectively.

Floor brokers said persistent increase in world prices has a relevance to the local rates as they have a negative bearing on the export competitiveness of textiles and make import of lint more expensive.

Moreover, local prices showed sympathetic increase in line with world rates choking alternate outlets for the spinners as they decide to stay on the local market instead opting for the foreign stuff, they said.

“Spinners and mills are at the receiving end for the time being as a loud whispering of a short crop has significantly curtailed their price manoeuvring tactics”, market sources said adding “their panic buying at the rising prices is reflective of this perception”.

Although official spot rates were raised to Rs2,575 per maund, they far below those at which ready business is being transacted.

Ready business was active as till late in the evening about 15,000 bales changed hands, the following being some of the notable deals:

SINDH VARIETY: 1,000 bales, Nawabshah at Rs2,700, 400 bales, each Bandhi and Qazi Ahmed also at Rs2,700.