KARACHI, Nov 16: Cotton prices on Thursday were quoted modestly higher as spinners and mills continued to build up long positions at the current levels amid fears of pressure on ready supplies in the backdrop of reports of a short crop.

Bulk of the buying again remained confined to Punjab varieties, notably from the southern Punjab ginneries where fine lots were sold as higher as Rs2,475 per maund.

Sindh types followed them after having traded below Rs2,400 for the last couple of weeks as some of the deals were finalised around Rs2,425 per maund.

Floor brokers said the increase in prices had reduced the premium gap to Rs50 per maund as compared to average normal varietal difference of Rs75 between the two, which reflects that the quality of the lint has shown a significant improvement.

“I don’t think the current mill scramble to grab the floating stocks reflects panic associated with a short crop,” says a leading ginner, adding “spinners and mills are out to cover their forward positions amid speculation of an imminent price flare-up”.

The Rs25 per maund increase in prices in physical business depending on the quality of lint in trade shows that there may be price war among the leading textile groups in the coming weeks, he said.

The developing situation on the cotton front shows that both the growers and the ginners could be the chief beneficiary of a possible crop shortfall.

That is perhaps why the import of lint from India may not have any relevance to the objective local supply and demand factors and buyers are expected not to miss the opportunity of bridging the supply gap, market sources said.

Official spot rates were quoted higher by Rs15 but in the ready section some of the deals were finalised around Rs2,475.

New York cotton futures also posted modest rise of 0.13 and 0.34 cents at 48.69 and 52.11 cents per lb for both the ruling December and the forward March contracts.

Ready off-take was fairly brisk as about 40,000 bales changed hands as under.

SINDH VARIETY: 2,000 bales, Dadu at Rs2,420 to Rs2,425, 1,000 bales, Tando Adam at Rs2,320 to Rs2,375, 600 bales, Mehrabpur at Rs2,400, 1,000 bales, Sanghar at Rs2,320 to Rs2,350, 800 bales, Shahdadpur at Rs2,375 to Rs2,400 and 400 bales, Nawabshah at Rs2,360.