KARACHI, Sept 27: Cotton prices on Saturday eased modestly from the current higher levels as some of the leading ginners in the Punjab cotton belt liquidated long positions slightly below the peak rate of Rs2,600 per maund after arrivals of phutti picked up.

Most of the deals were reported at Rs2,575 on the higher side and Rs2,500 per maund on the lower side as compared to Rs2,575 to Rs2,600 a day earlier owing to hasty selling by the ginners.

Ginners, however, appear to be in a commanding position and hold a firm grip on the price line owing to reports of a damage to the crop and higher world rates, market sources said.

Ginners knew well that imports of lint at the current world rates are not competitive and spinners and mills have to operate within the local market and they are dictating prices according to their own parity levels as phutti prices have also shown sympathetic increase, they said

Reports of damage to cotton crop in some of the areas continue to set price trend but spinners and mills appears to be at a disadvantage because prices of their end-products are not showing sympathetic increase on the export markets, dealers said.

“A hide-and-seek game is being played between the ginners and the spinners as each one of them is trying to tilt the price balance in their respective favour,” they said.

However, for the near-term it appears to be a no-win situation as the size of the crop and the extent of the damage if any would, in the final analysis, set the market’s future trend, some others said.

The arrival figures of phutti into the ginneries for the fortnight ending Sept 30, 2003 are due to be released by the Pakistan Cotton Ginners Association (PCGA) by the first week of the next month and that will give a fair idea of the total crop, they said.

Bulk of the mill buying remained confined to Punjab varieties followed by reports that quality of lint has shown a considerable improvement during the last couple of weeks.

The southern Punjab lint continues to fetch highest price of around Rs2,575 per maund as compared to its central Sindh and Punjab varieties, which are available at a discount of Rs50 to Rs75 per maund.

Floor brokers said both the upper Sindh and the southern Punjab ginners as well as growers are quality-conscious and generally operate under the expert guidelines to produce contamination-free lint. That is why their produce get premium prices, they said.

Official spot rates were firmly held despite some softening in the ready but in physical trading most of the deals were done well above them.

Ready offtake was active and amounted to about 10,000 bales, the following being notable among them:

SINDH TYPE: 400 bales, Mirpurkhas at Rs2,400, 700 bales, Sultanabad at Rs2,400 to Rs2,450 and 200 bales, Pithoro at Rs2,475.