KARACHI, Jan 21: Active trading was again witnessed on the cotton market on Saturday as the spinners indulged in panic buying fearing further increase in prices owing to a short crop.

An idea of price flare-up may well be had from the fact that fine lots, both from the upper Sindh and southern Punjab ginneries, were purchased at Rs2,550 per maund.

“The market is heating up beyond the ground realities on panic mills’ buying and in the process prices could rise further,” brokers said adding: “the crop is certainly below the target but not that short and could meet local mill demand.”

“It is now a straight fight between the spinners and the ginners as the grower is now out of the arena after having sold its produce,” they said adding that both are an expert in tactical price games.”

No one could deny the fact that mills’ consumption is on the higher side of the previous consumption figures in the backdrop of a major breakthrough on the export front, but supplies including local crop of 12m bales plus, a buffer stock of half a million bales with the TCP, and carryover stocks with spinners, are enough to see the year through, market sources said.

“What the spinners need is a little patience over the supply position and should not push lint prices to that level where the textile export may not face the international competition from the other producers,” they added.

The final crop figure is yet to come and it could be higher as no one knows how much stocks are lying with the ginners including those, which may not account for in the inventory books, some others said.

However, no one could dispute the fact that the world cotton production may lag far behind the global consumption during the current year but that did no mean panic conditions, they added.

In an identical panic was witnessed a couple of years back when prices soared to an all-time high of Rs3,600 per maund, spinners seem to be steadily moving to that end and may be at the receiving end hurt the official export drive, some spinners fear.

Official spot rates were revised upward by Rs25 per maund but in the ready section some of the deals were done well above them.

New York cotton futures also recovered from the overnight lows and were quoted higher by 0.81 and 0.71 cents per lb for both the ruling March and distant May at 56.57 and 57.59 cents per lb respectively.

Ready off-take was active totalling about 15,000 bales as under: 1,500 bales, upper Sindh, at Rs2,525, 2,000 bales, each Rajanpur, D.G.Khan and 1,000 bales, Gaggon at Rs2,550, 1,400 bales, Rahimyar Khan, 1,000 bales each Uch Sharif and Ahmedpur East at Rs2,500.