KARACHI, Sept 18: Active trading was witnessed on the cotton market on Thursday as leading spinners and mills indulged in big-lot business fearing further increase in prices.

Bulk of the business was finalized on average rate of Rs2,450 per maund both in the Sindh and the Punjab varieties, which were traded at par owing perhaps to micronaire problems.

The renewed wave of mill buying was attributed to reports of damage to the US crop owing to the recent hurricane which pushed New York cotton futures by limit-gains, up 2.03 and 2.21 cents at 64.63 and 66.59 cents per lb for both the ruling October and the distant December settlements respectively.

Floor brokers said the perception that the bullish trend on the world markets could spillover to the local market triggered panic buying both from the spinners and the mills but ginners made selective selling anticipating further rise in prices.

“The current volatility of the cotton trade do not allow spinners and mills to plan their buying strategy on a long-term basis in line with their forward export commitments”, one spinner claims.

The either-way price movement of about Rs200 per maund being witnessed during the last couple of sessions worries them as they failed to balance their inventories on the higher and lower side of the average market rates, he says.

Their other worry is conflicting reports about the pest attack and damage to standing crop in the entire cotton belt as in the absence of official word on the latest crop situation speculators are holding the price line, some other spinners said.

Meanwhile, arrivals of phutti into the ginneries were maintained on the higher side as growers are not inclined to hold their stocks for even a day because of erratic price movements.

Official spot rates were lowered by Rs25 per maund at Rs2,400 although most of the deals in the ready section were done above them. Ready business was active thanks to strong presence of mills and as a result about 10,000 bales changed hands till late in the evening.

The following are deals reported by the Secretary of Karachi Cotton Brokers Association, Naseem Usman.

SINDH VARIETY: 1,800 bales, Shahdadpur at Rs2,450, 1,200 bales, Tando Adam at Rs2,450, 200 bales at Rs2,460, 200 bales, Mirpurkhas at Rs2,325 and 200 bales, Nayabad at Rs2,450.