KARACHI, Jan 1: Cotton prices on Thursday rose further as ginners held on to their positions in the backdrop of prevailing bullish trend on the world markets. Contrary to the prediction, the market opened the new year account on bullish note on the perception that the entry of China into the world cotton market with a big shopping list may not allow prices to fall from the current peak levels, market sources said.

Most of the ginners, still having substantial unsold stocks in their godown, appear to be very selective sellers anticipating further increase in prices.Although leading spinners were in no mood to purchase at the higher asking prices, some of them were forced to cover their forward positions against foreign sales of cotton yarn.

However, the ready business was light. Unlike the previous sessions, some of the deals were finalized at the higher rate of Rs3,400 per maund as some of the spinners and mills need fine lots to produce higher counts of cotton yarn.

"Lint prices are heading to hit their pre-reaction level of Rs3,600 per maund in the coming sessions as ginners appear to be in a commanding market position now," analysts said.

Indications are that spinners may not indulge in panic buying as leading among them have already made a substantial covering purchases from the foreign market below 70 cents per lb shipments against which are already arriving.

According to market sources, spinners and mills had made forward purchases of about 0.7m bales followed by reports of a short local crop owing to pest attack in the major cotton growing areas.

About 0.3m bales have already arrived in their godowns, while the balance is well in the process of shipments and by June next year import of lint will be completed.

The next couple of sessions are very crucial for the textile industry as the arrival figures of phutti into the ginneries for the fortnight ended Dec 31, 2003 will give a fair idea of the crop and its likely impact on the prices, dealers said.

New York cotton futures on Wednesday night were quoted further higher by 0.70 and 0.71 cents per lb for both the ruling March and the distant May settlements at 75.07 and 76.13 cents per lb respectively.

But there was no change in the local official spot rates, although in physical trading most of the deals were done well above them.Ready offtake was light totalling about 10,000 bales, the following being some of the notable deals: 1,000 bales, Lodhran at Rs3,400, 1,000 bales, Samundri at Rs3,350, 450 bales, Tandialawala at Rs3,325, 400 bales, Muridwala and 500 bales, Rahimyar Khan also at Rs3,325.