KARACHI, Aug 16: Physical business on the cotton market on Tuesday was active as a section of spinners continued to build-up long positions in the new crop at the current levels.

But general perception is that prices may fall from the current higher levels during the next couple of weeks partly because of falling cotton yarn prices and partly to resumption of operations by the central Punjab ginners, brokers said.

“Supply position is expected to improve further as more ginneries in the lower Sindh cotton belt are resuming operations”, they said and added “with most of the leading ginners already having stocks in the godowns for the next couple of months, their demand may remain on the lower side”.

Moreover, the persistent fall in New York cotton futures on higher crop ideas and slow exports could have negative impact on the local prices as spinners and mills can opt for cheaper foreign stuff, they said.

For the last about a week, both the NYCE ruling October and the forward December contracts are falling daily and on Tuesday were quoted 0.98 and 1.07 cents lower at 46.15 and 47.93 cents per lb respectively.

In the absence of speculative activity prices could fall further on New York market in the coming weeks which in turn could have a negative impact on the local price line.

However, a section of spinners, which did not actively participate in the TCP auctions, was active buyer of the new crop at the current levels and was lifting all the lots offered by the ginners mostly at their asking prices.

Meanwhile, reports coming from the central Punjab cotton belt indicate that picking operations of phutti in some of the areas have been resumed and some of the ginneries in the Sahiwal and Burewala areas are expected to resume operations during the next couple of weeks.

Crop position in the major cotton growing areas including upper Sindh and southern Punjab is satisfactory and there are no reports of serious pest attack because of warm weather.

Official spot rates were held unchanged after a decline of Rs75 during the last couple of sessions in sympathy with higher rates at which ready business was being transacted.

Ready off-take totalled 3,000 bales all from the lower Sindh cotton belt changed hands. The following being some of the notable deals: 1,200 bales, Tando Adam at Rs2,250, 400 bales, Mirpukhas at Rs2,245 to Rs2,250, 200 bales, Shahdadpur at Rs2,270 and 200 bales, Sanghar at Rs2,275.