KARACHI, Feb 11: Physical activity on the cotton market on Monday gained momentum as spinners made an extensive buying followed by reports that the government has asked the Trading Corporation of Pakistan to resume buying, suspended some days back.

The official directive followed in response to ginners’ SOS to the government to bail them out from the impasse of falling prices and larger unsold stocks.

Although the TCP did not specify the rate at which it would resume purchasing operations, its entry into the market is expected to check further decline in prices.

During its earlier operation, it has purchased about 0.150 million bales, a good part of which has already been sold to foreign buying after inviting international tenders.

“The report was well-received in the ginning sector as presence of the TCP in the market will certainly push prices higher from the current lower levels,” a secretary of Karachi Brokers Association, Nasee Usman, said.

Already some of the leading group of spinners thronged the market and indulged in big lot business to corner the unsold stock of fine lots lying with the ginners, he adds.

Another broker said an idea of panic in the spinner sector, which was hereto buyer at will being the sole buyer, might well had from the fact that a leading group purchased 15,000 bales from the upper Sindh ginners on an unfixed basis. The rate will be settled next month prevailing at the date of taking delivery.

He said prices might not show sharp rise from the current lower levels, but were expected to maintain a certain level acceptable to the ginners in the coming weeks.

There could be, however, a big push in prices if the New York cotton futures cross the barrier of 40 cents per lb for the distant May contract, which is currently hovering around 39 cents per lb.

Ready offtake was, therefore, on the higher side as till late in the evening about 20,000 bales, changed hands as under:

SINDH VARIETY: 10,000 bales of Mando Daro, 3,000 bales, Salehpat and 1,500 bales of Pano Akil unfixed at official spot rates in March, 500 bales, Dharki at Rs1,600 and 200 bales of Sanghar at Rs1,480.