KARACHI, June 1: Cotton prices on Thursday rose further as spinners and mills resumed fresh covering purchases fearing a pressure on supplies before the arrival of new crop from the lower Sindh ginneries.

In physical trading most of the deals were finalised around Rs2,600 per maund, the highest rate for the current season, and brokers predict the falling stocks with ginners could push prices further higher.

In the absence of reports about fresh cotton sales by the TCP, spinners again opted for the stuff available with the ginners leading to fresh increase in prices.

“The spinners and mills may remain at the receiving end until the supply position shows improvement,” predicts a leading cotton broker, adding “the falling lint stocks with the ginners could mean anything to the future price mechanism”.

According to market sources ginners may not have stock of more than 0.250m bales, which is far below the mill demand for the current season ending Aug 31, 2006.

“The price war between the ginners and the spinners is on, but the big question is that whether or not the latter would go beyond its export parity level.”

But ginners in the southern Punjab cotton belt are sitting pretty tight- lipped on their holding capacity and are eyeing fresh increase in prices during the post-budget trading sessions.

Official spot rates were revised upward by Rs25 per maund at Rs2,500 but most of the deals in the ready section were done around Rs2,600.

New York cotton futures on the other hand failed to hold on to previous gains and fell by 0.71 and 0.02 cents for both the ruling July and the forward October contracts at 50.94 and 55.28 cents respectively.

Ready off-take was active totalling about 7,000 bales, the following being some of the notable deals: 2,000 bales, from various southern Punjab ginneries at Rs2,600, 700 bales, Lodhran, 400 bales, Mailsi and 600 bales, Gothki also at this rate and 2,800 bales, inferior quality at Rs2,475.00.