KARACHI, Oct 8: Cotton prices on Wednesday rose to 10-year highs as haunted by perceptions of a short crop spinners and mills continued to make panic buying to grab the floating stock.

Most of the deals late on Tuesday evening and on Wednesday were done above Rs2,700 per maund irrespective of quality premiums as price war among the spinners remained at a peak level for the third session in a row.

“But alarm bell rang on the floor of the Karachi Cotton Exchange when some of the leading spinners lifted a good number of lots at Rs2,800 per maund, claimed to be the highest rate for the last about one decade”, brokers said.

“The market witnessed a tussle between the ginners and the spinners as the former was seller at Rs2,800 per maund, while the latter was not willing to go beyond Rs2,750”, some others said, adding “standoff caused a substantial shrinkage in the ready offtake”.

But unconfirmed reports coming in from the Punjab cotton belts indicate leading spinner groups were not inclined to keep to the sidelines and continued to grab the floating stock irrespective of the asking prices.

Leading ginners said it was pretty difficult for us to sell lint below Rs2,800 per maund after having purchased phutti between Rs1,250 and Rs1,300 per 40 kg.

“The arrivals of phutti into the ginneries are drying up each day but it is not clear whether or not growers are holding back phutti or the crop is that short”, they said.

Picking operations of phutti in some of the areas have been wound up owing to extensive damage to the standing crop and farmers are preparing the fields for the wheat crop, reports reaching here said.

Market sources said conflicting reports about the pest attack and expected production figures have confused the entire cotton outlook providing a fertile ground to the speculative forces to tilt the price balance in their favour.

Owing to a price flare-up in the ready section, official spot rates were also raised by Rs100 per maund, being billed as the largest-increase in a single session for the last several years.

New York cotton futures on the other hand showed fresh decline on renewed selling and fell by 0.55 and 0.46 cents at 66.85 and 68.03 cents per lb for both the maturing October and the distant December contracts respectively.

Ready offtake was large totalling about 20,000 bales including some big deals, bulk of which was transacted late on Tuesday night in the Punjab cotton belt. The following are some of the notable deals:

SINDH VARIETY: 400 bales, Bandhi at Rs2,700, 1,000 bales, Nawabshah at Rs2,700, 400 bales, Qazi Ahmed also at the same rate.