KARACHI, July 4: Cotton market showed firm trend on Friday as new crop prices remained stable around the previous levels amid light trading and the absence of leading spinners.

But the demand from the textile sector was far below normal daily intake as they are said to be still in the process of assessing the impact of duty drawback on their export business, market sources said.

But some of them holding short stock positions are in the market and lift modest lots that fall in line with their export parity levels, but seldom go beyond that figure.There is also a perception shared by spinners and mills that future price outlook will be set by the position of the crop whether or not it is in line with the official production target.

That is perhaps why the selling prices were contained well below the widely talked average level of Rs4,000 per maund as the ginners of the central Punjab cotton failed to maintain their price cartel, local floor brokers said adding their weaker links having a little holding capacity sold their freshly ginned stocks on daily basis.

However, indications are that prices could ease further from the current levels after the phutti arrivals gathered fresh momentum and ginners faced the problem of near-glut, they said.

They said some of the spinners from the Punjab also lifted modest lots of the current crop around the prevailing prices as leading ginners, holding unsold stocks of about 15,000 bales, were inclined to clear the backlog before new crop arrivals increase.

Official spot rates, therefore, did not show any change and were firmly held at the last level of Rs3,650, although most of the deals for ready delivery were done well above them.

New York cotton futures, on the other hand, suffered fresh fractional decline of 0.10 and 0.06 cents per lb at 67.02 and 72.20 cents for both the maturing July and the new crop October settlements, respectively.

The following are some of the deals gone through in the new crop from the central Punjab ginneries

400 bales, Arifwala at Rs3,700 to Rs3,865, 400 bales, Pakpattan at Rs3,675 and 200 bales, Chishtian at Rs3,700.