KARACHI, Nov 28: Physical business on the cotton market on Tuesday fell sharply as price ideas of buyers and sellers failed to find a meeting ground.

After having phutti at much higher rate of Rs1,300 per 40 kg, ginners further raised their asking prices to around Rs2,600 per maund, which are much higher than the export parity rates of spinners and mills, they said.

“Spinners and ginners remained locked in price war at the peak of the season when the market in normal conditions hummed with activity on hectic buying,” floor brokers said.

It was for this time during the current season no business was reported by the leading brokerage houses owing to higher prices, they said.

Market sources said that apart from higher phutti prices amid reports of holding back of stocks by the growers, the other aiding factor behind the higher asking prices was said to be sharp rebound staged by the New York cotton futures.

“The entry of China as a buyer on the world markets seems to have signalled a bull-run on the markets of major producers, notably the US,” they said, adding “Pakistan market followed the world trend”.

The local market is expected to stay firm partly in sympathy with its international counterparts and partly to fears about the short supply, they added.

Official spot rates, however, did not show any change and were held at the overnight level of Rs2,450 per maund.

New York cotton futures on the other hand posted gains of 1.41 cents per lb for the maturing December contract and 0.98 cents for the forward March at 49.00 and 53.10 cents per lb respectively.

Late on Monday evening, no business was reported owing to price factors but some brokers said stray lots did change hands on Tuesday around Rs2,450 to Rs2,475 per maund as some of the leading mills, which are fully booked for the current quarter ending Dec 31, 2006, were said to be willing buyers at the higher asking prices.