KARACHI, April 7: Physical business on the cotton market on Saturday shrank to a modest proportion as spinners and mills were not inclined to buy at the higher asking prices.

Some of the leading spinners, however, lifted fine lots from the southern Punjab ginneries at Rs2,800 per maund but others stayed on the sidelines apparently awaiting some fresh positive developments on the supply front, floor brokers said.

“The market now is in the tight grip of the ginners who are not inclined to lower their asking prices as leading among them are not worried over the lower unsold stocks,” they said.

Most of the ginners who are holding on bulk of unsold stock of fine lint are entertaining ideas of an imminent price flare-up based on supply and demand factors, some others said.

“An unsold stock of half a million bales is too small figure viewed in the background of total annual mill consumption of around 15m bales,” cotton analysts said.

According to official figures the mill intake till April 1, 2007 was 11.595m bales and they were importing foreign lint to bridge gap as the new crop from the lower Sindh ginneries will hit the market sometime in late July or early August.

Market sources said some of leading spinners and mills had already made forward deals for well over half a million bales and shipments were on their way.

But their weaker links are facing supply problems owing to higher local prices and financial problems and some of them had already curtailed their daily operational shift to keep the wheels moving, they added.

The official spot rates were again revised upward by Rs50 per maund at Rs2,725 per maund, although some deals in the ready section were done well above them.Ready offtake was light a single deal of 1,600 bales from a Khanpur ginnery changed hands at Rs2,800 per maund.