KARACHI, Sept 24: Cotton market on Wednesday showed bullish trend as prices rose further on panic mill buying after the reentry of private sector exporters in the cotton trade.

“The market witnessed a virtual price war between the exporters and the spinners as both tried to grab the floating stock amid fears of further tight conditions,” a leading cotton broker Naseem Usman said.

The big-lot business in the central Sindh lint and at rates well above Rs2,500 per maund reflects that the exporters had already made larger forward export commitments and are out to cover them.

The notable feature was that a Karachi-based ginning factory being fed by phutti from the lower Sindh cotton belt has made a maiden debut on the processing front and sold 200 bales around the prevailing prices well above Rs2,500.

The world cotton scene is progressively heating up followed by reports of a short crop in China and India and their big shopping list has sent bullish signals in the cotton trade, he adds.

Another aiding factor was steep increase in prices of New York cotton futures, which had almost stabilized well above the 60-cent per lb mark for the last couple of weeks, allowing the local exporters to swing back into the export business after a lean year.

“But things are being pretty difficult for the spinners and the mills as higher lint prices limits their manoeuvring on the export front as end products don’t show sympathetic rise”, market sources said.

They said exports should be allowed after the size of the crop is fully known and early season entry of the exporters in the market pushes prices higher, having a negative impact on the export of value-added products.

Floor brokers said growers are the chief beneficiary of the current price flare-up as some of them have already sold a substantial quantity at Rs1,160 per 40 kg against the official support price of Rs800.

They said a considerable decline in the inflow of phutti into the ginneries showed that leading growers are holding back stocks to push prices further higher.

There was no change in the official sport rates for the third session in a row, while New York cotton futures rose sharply by 1.85 and 1.14 cents at 65.40 and 66.36 cents per lb for both the ruling October and the distant forward contracts respectively.

Ready offtake was large as till late in the evening about 20,000 bales including 10,000 bales from the Punjab ginneries changed hands at Rs2,425 per maund.

The following are details of deals in the Sindh variety: 2,000 bales, Tando Adam at Rs2,500 to Rs2,525, 2,000 bales, Shahdadpur at Rs2,525, 1,000 bales, Nawabshah at Rs2,525, 200 bales, Sarari at Rs2,530, 1,000 bales, Khipro at Rs2,525, and 1,000 bales, Sanghar at Rs2,475 to Rs2,500.