KARACHI, July 15: Cotton market on Tuesday showed firm trend as new crop prices are heading to hit the seasonal high of Rs2,400 per maund as mill demand is progressively picking up.

Already, most of the deals are being finalized around Rs2,375 per maund against Rs2,325 a week earlier and brokers predict the higher world prices could well be the chief bullish influencing factor behind the local flare-up.

However, spinners and mills are making guarded purchases under a well-planned strategy apparently in an effort to check any speculative rise in prices because of pressure on local supplies and higher world rates, brokers said.

New York cotton futures maintained their upward drive for the fourth session in a row, major speculative pressure being on the new crop December settlement, which soared to 62.68 cents per lb and the ruling October contract was quoted higher by 0.77 cents at 60.85 cents per lb.

“World prices well above the 60-cent per lb mark could give the needed boost to the local rates in the coming weeks”, brokers said “but mills are now caught in an awkward situation as far as their export parity levels are concerned”, they added.

There is a turmoil on the world textile centre followed by reports of persistent increase in lint prices and its likely negative impact on the end-products during the current season, they said.

Although spinners and mills have increased the use of synthetic yarn to about 30 to 35 per cent in a bid to keep the prices of end-products competitive on the world markets, expensive lint could further erode their profit margins, market sources said.

Spinners say world demand for both finished cloth and yarn is picking up as apart from traditional importers some new ones are also in line owing perhaps to higher world prices.

There is a loud whispering in the cotton circles that the New York cotton futures are heading to hit 20-year highs at 70 cents per lb as world production is too small to match the consumption needs of the world textile industry, dealers said.

There was no official change in the spot rates but in physical trading most of the deals were done well above them.

Ready offtake remained light totalling about 2,000 bales, the following being some of the notable deals:

NEW SINDH CROP: 100 bales, each Kot Ghulam Muhammad and Sultanabad at Rs2,350 and 500 bales, Sultanabad at Rs2,375.