KARACHI, Jan 1: Trading activity resumed on Tuesday after Punjab mills were told they would get at least 16 hours of electricity and cotton prices remained flat, brokers said.

Prime Minister Raja Pervez Ashraf instructed the Ministry of Water and Power to restore electricity supply to textile mills on independent feeders in Punjab for 16 hours on a daily basis from 11pm, according to Punjab chairman of All Pakistan Textile Mills Association (Aptma) Shahzad Ali Khan. On Monday, there wasn’t even a single deal or transaction.

The Karachi Cotton Association kept its official spot price unchanged at Rs6,000 per maund and in Sindh, 2000 bales of cotton were exchanged at Rs6,000 and in Punjab, 5,400 bales of cotton were exchanged at Rs5,825 to Rs6,100.

Brokers said activity is likely to improve in the coming days after the Prime Minister’s reassurances about resolving the energy issues faced by the textile industry.

New York cotton edged slightly higher but finished 2012 down 17 per cent on the year, posting the third-biggest annual decline among commodities, as the market struggled with oversupply and sluggish demand.

This year, the US government forecast a record surplus of just under 80 million 480-lb bales by the end of the 2012-13 season to end-July 2013.

Cotton enters the new year with questions over China's policy towards stockpiling and forecasts that farmers will grow more wheat and soybeans, which posted the biggest price gains among commodities in 2012 as worst drought in more than half a century hit the US corn belt.

Analysts said many farmers will find it profitable to switch to grains from cotton.

The following transactions were reported on the ready market on Tuesday:

SINDH TYPE: 2,000 bales, Khairpur at Rs6,000.

PUNJAB VAREITY: 400 bales, Burewala at Rs5,825, 400 bales, Pul Bagar at Rs5,850, 400 bales, Haroonabad at Rs5,900, 2,000 bales, Rajanpur at Rs6,000 to Rs6,100, 1,000 bales, Rahim Yar Khan at Rs6,000 to Rs6,100, 600 bales, Sadiqabad at Rs6,050 and 600 bales, Mianwali at Rs6,100.