KARACHI, June 24: Trading on the cotton market on Saturday picked up modestly as some of the spinners covered their forward positions against foreign sales of yarn and finished textiles.

The interesting feature was that some of the private sector exporters sold over 3,000 bales purchased at the lower rates earlier in the season owing to an increase in prices including a deal of 1,000 bales at Rs2,710.

Floor brokers said pressure on ready supplies continued to haunt spinners as at this time of the season when the new crop could make debut within the next couple of weeks, they are not inclined to probe foreign markets to make up their short positions.

Ginners from the southern Punjab cotton belt, who are holding the fort and try to name their own price for the fine lots, were not aggressive sellers. They preferred to hold on to their unsold positions rather than selling lint at the lower prices.

“Ginners know now it is their turn to pass on the extra burden of higher phutti prices to the spinners as they have the mechanism to shift it to the foreign buyers,” some other said, adding “whether or not the TCP could play a price stabilising role could be the deciding factor.”

Being in a commanding position, ginners raised their asking prices and spinners holding short positions were obliged to pay more, notably for fine lots. Some of the deals were reported as higher as Rs2,710 per maund, which was said to be the season’s highest rate so far.

But on the other hand New York cotton future market was in turmoil in the absence of China, being a major buyer of the US cotton. An idea of fall in New York cotton futures may well be had from the fact that the matured July contract was liquidated 3.00 cents per lb lower at 46.12 cents.

The New crop October settlement has also dropped from the seasonal high of 56.00 cents per lb to 52.11 cents owing to persistent speculative selling by the leading cotton traders who hold long positions, dealers said.

Although the import of foreign lint is getting competitive each day, spinners awaiting the arrival of the new crop from the lower Sindh cotton belt and may not opt for imports at this stage, they added.

They said owing to a short crop and rising mill demand in the backdrop of higher exports, the increase in local prices was inevitable as it was guided by supply and demand factors.

Official spot rates were also revised upward by Rs50 per maund at Rs2,600 in line with the increase in prices at which official business was transacted.

Ready off-take was moderately active as about 6,000 bales changed hands, the following being some of the notable deals: 400 bales, Muhammadpur Dewan at Rs2,700, 1,000 bales (exporter to mill) at Rs2,710, 1,000 bales, Rahimyar Khan, 200 bales, Vehari at Rs2,650, 300 bales, Tibba Sultanpur at Rs2,660, 2,200 bales, (exporter to mill) at Rs2,640.