KARACHI, Feb 20: Trading on the cotton market on Monday resumed on a firm note as ginners held on to the unsold positions anticipating further increase in prices. As a result, physical business remained on the lower side as spinners extended guarded support in an apparent effort not to fuel price flare-up caused by a short crop, brokers said.

Stray lots did change hands but below the asking prices of ginners as spinners and mills were not inclined to buy at the weekend higher level of Rs2,600 per maund.

“A battle of wits is expected to gather fresh momentum as ginners are entertaining higher price ideas in the coming weeks and are holding on to their unsold stocks of 2.2m bales, while spinners have slowed down their daily intake to keep prices within the current levels depending on quality,” market sources said. Both the ginners and spinners are now well aware about world cotton situation and playing their cards well, they said, adding ginners are expecting an increase in prices as world production well below the consumption, which in turn could fuel a price flare-up in the coming week.

Spinners and mills need another half a million bales to see the current season through have curtailed their presence in the market to contain any price flare-up, they added.

Some of the leading spinners and mills which had built-up long positions earlier in the season at lower levels are not in a hurry and lift only those lots which fall in line with their export parity levels.

However, ginners are not worried over the mill “go slow” and are steadily holding on to their position despite the fact that there is a pressure on their liquidity owing to bank demands.

Official spot rates were firmly held at the last level of Rs2,545 but in the ready section some of the deals were finalized on quality premiums.

Ready off-take was light totalling about 3,000 bales as under: 2,400 bales, Rahimyar Khan at Rs2,575 and 400 bales, Uch Sharif at Rs2,500.