KARACHI, Dec 31: Cotton market closed the last session of the year 2005 on a firm note as conflicting reports about the size of the crop enabled both the growers and the ginners to control the price mechanism and held an upper hand.

But spinners and mills, on the other hand, failed to take a full advantage of competitive prices earlier in the season and have to pay more during the mid-season trading, brokers said.

“Prices could rise further from the current average rate of Rs2,400 per maund at the fag-end of the cotton season followed by reports of below target cotton output,” they said.

Spinners and mills are said to be in the process of evolving the new year buying strategy to remain competitive on the textile world as they have vowed to achieve the export target of $14 billion and their own contribution to the total being $8 billion plus, market sources said.

Some of the leading textile groups seem to be in a comfortable stock positions as they have made an extensive buying around an average rate of Rs2,200 per maund early in the season, they said.

However, higher export sales and competitive export prices are expected to keep them in an advantageous position as they have imported a substantial quantity of lint to fill in the supply gaps, if any.

According to the official figures spinners and mills have imported 0.106m bales during July this year, making the total, since Aug 2004 to July 2005, to 2.249m bales.

That was perhaps why leading among them made selective buying during the last couple of months to keep prices within their export parity levels. Moreover, they are also eyeing half a million bales lying with the TCP as buffer stocks to meet the local demand in case of shortage, spinners said.

As a result, official spot rates were revised upward by Rs10 per maund at Rs2,375 per maund in line with those being quoted in physical trading.

New York cotton futures also posted a modest rise of 0.4 and 0.36 cents per lb at 54.19 and 54.70 cents per lb for both the ruling March and forward May settlements respectively.

Ready off-take was light totalling about 7,000 bales both from the Sindh and southern Punjab cotton belts done at around Rs2,350 to Rs2,400 per maund, but a deal of 1,600 bales from the Upper Sindh ginneries was finalized at Rs2,400 to Rs2,425 per maund.