KARACHI, July 15: Cotton prices on Friday were quoted higher by Rs25 per maund as pressure on ready supplies of lint continues followed by reports of dwindling unsold stocks with ginners.

An idea of mill buying and its scramble to grab the floating stock of lint may well be had from the fact that one of its members purchased 800 bales from an exporter at the season’s highest rate of Rs2,535 per maund.

“Spinners and mills may have good reasons to buy lint at the seasonal highs that too at the fag-end of the season when the new crop from lower Sindh is due by the next month,” says a leading cotton consultant Naseem Usman. “Their export parity levels may be much higher.”

The higher rates also reflect that the mills and spinners are out to hit the export target of $10 billion during the next season on the strength of massive fiscal relieves, including zero-rated duty, he said.

“They have already purchased about a million bales from the TCP in addition to 12m bales from the ginners and many may ask what will they do with the massive quantity of 2m bales plus.”

If the total is meant for value addition or to create a buffer stock for the next year to cover up production losses it is welcomed, but if it aims at grabbing the floating stock by the leading group, their weaker links will be at the receiving end, some others said.

The spinners and mills are also eyeing the next TCP tender for 86,700 bales on next Monday and are expected to lift the entire stocks irrespective of the reference price as is evident from the craze for the local lint, they said.

Meanwhile, reports coming from the lower Sindh cotton belt indicate that arrivals of phutti into ginneries were fairly steady and a couple of factories are expected to resume operations to honour their forward deals.

Some of central Punjab ginners are also said to be in the Sindh phutti market and are buying it at Rs1,025 to Rs1,030 per 40 kg. Leading among them resume ginning operation on Sindh based phutti.

With the exception of a deal of 800 bales between the exporter and a spinner, physical business in the ready section remained at a low ebb.

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