KARACHI, Jan 9: After several lean sessions owing to various reasons, modest physical activity was witnessed on the cotton market on Tuesday as some of the spinners resumed covering purchases.

About 5,000 bales changed hand well above the official spot rates indicating that prices were heading further higher as ginners were out to exploit the idea of a lower crop, floor brokers said.

An indication of an imminent price flare-up was well reflected in southern Punjab lint, which was traded as higher as Rs2,600 per maund, billed as the seasonal high, they added.

They said that the latest official arrival figures released by the Pakistan Cotton Ginners Association (PCGA) though showed a modest fall but both the buyers and sellers had fair idea of the crop which would be well below the revised target of 12.5m bales.

But whether or no spinners and mills would opt for lint well above their export parity levels is not clear, market sources said, adding “the falling world textile market, notably of cotton yarn may not allow them to take even a calculated risk at this stage”.

Moreover, leading spinners have already made forward import deals and some of the consignments had already arrived during the last couple of weeks, they said.

Ginners said arrivals of phutti were drying up each day as those who were holding on to their stocks for better price were also dumping their stocks fearing fall in prices because quality gets damaged owing to long storing as it heats up.

The next couple of weeks are expected to be very crucial for the cotton trade as both the ginners and spinners will try to outwit each on the price front, says a leading broker.

Official spot rates were again held unchanged at the previous close of Rs2,500 per maund, although in the ready section most of the deals were done well above them.

New York cotton futures on the other hand showed fractional rise of 0.11 and 0.27 cents per lb at 54.53 and 55.38 cents per lb respectively for both the ruling March and distant May settlements.

The following are some of the deals, which gone through in the ready section: 938 bales, Shujabad at Rs2,600, 1,000 bales, Sadiqabad at Rs2,565-2,575, 400 bales, Liaquatpur at Rs2,545 and 400 bales, Sahiwal at Rs2,400, 800 bales, Sanghar at Rs2,350-2,400 and 300 bales, Hyderabad at Rs2,500 (BT) variety.