KARACHI, Dec 22: After last couple of weeks hectic trading, the activity on the cotton market on Friday remained sluggish as buyers and sellers kept to the sidelines. “It appears to be the beginning of price war between the ginners and the spinners as no deal was struck in the ready,” brokers said, adding “ginners have raised their asking prices but mills and spinners are not inclined to go beyond their export parity levels”.Delivery problems owing to higher freight rates were significantly adding to their overheads and consequent sluggishness on the ready counter, they said.

Although some of the local brokers claimed that a couple of lots changed hands and physical deliveries were also made to the Punjab mills, there were no reports of arrivals in the local mills, they said.

Market sources said year-end closing in part also affected the daily activity as some of the leading mills were taking overview of their inventories before opting for new year buying, they added.

Meanwhile, reports coming from the upper Sindh and southern Punjab cotton belts indicate that arrivals of phutti are drying up each day and there are no reports of holding back of stocks even by the leading growers.

Ginners said they were now paying to the growers on quality-based phutti and according to official grading and in the process prices had declined from the seasonal peak level of Rs1,425 to around Rs1,250 and below.

It was in this background that the official spot rates were held unchanged at the last levels in the absence of feedback from the ready market.

New York cotton futures on the other posted modest gains of 0.75 and 0.66 cents at 55.37 and 55.80 cents per lb for both the ruling March and the distant May contracts respectively on revival of foreign demand.

Ready off-take was light but unconfirmed sources said that about 5,000 bales both from the upper Sindh and southern Punjab cotton belts changed hands around Rs2,550-2,600 depending on quality.