KARACHI, Aug 29: Cotton prices on Tuesday rose further higher as spinners and mills made near-panic buying followed by reports of damage to standing crop. For the second session in a row, lint prices were raised by another Rs50 per maund in addition to Rs25 increase on Monday but ginners were reluctant sellers anticipating further rise in prices, floor brokers said.

Ginners attributed the current price flare-up to higher phutti rates, which soared to Rs1,100 to Rs1,150 per maund as progressive growers were holding on to their positions rather than selling below their asking prices.

“The heavy monsoon rain did damage crop early this month, but the extent of the damage in bales is not clear,” cotton analysts said “official agencies and monitoring agencies should immediately announce the initial crop loss to check speculative increase in prices”.

The crop may be short but the figure being speculated by certain quarters is on higher side adding to the current price flare-up, they added.

The current panic-buying by the spinners and mills, leading to a price war, could have negative impact on the export front as well as foreign exchange earnings owing to higher input costs, some others said.

Already during the last two sessions, lint prices had risen by Rs75 per maund, having negative impact on the forward export commitments of the textile sector.

Moreover, arrivals of phutti into the ginneries have slowed down despite the fact that picking operations are said to be in full swing in the entire cotton belt, market sources said, adding “growers have raised their asking prices”.

Official spot rates were, therefore, revised upward by Rs50 at Rs2,550 per maund in sympathy with higher phutti rates.

New York cotton futures on the other hand fell by 0.32 and 0.42 cents per lb at 53.18 and 55.18 cents per lb for both the ruling October and the forward December contracts respectively.

Ready off-take was on the higher as till late in the evening about 3,000 bales changed hands as under.

SINDH VARIETY: 400 bales, Sanghar at Rs2,475, 200 bales, each Tando Adam and Mirpurkhas at Rs2,525.