KARACHI, April 4: Cotton prices on Wednesday soared to an eight-year high level as some of the leading textile groups indulged in panic buying and finalised big deals at Rs2,800 per maund.

The last price flare-up was witnessed about eight years ago when lint prices soared to an all-time high of Rs3,600 per maund and phutti was traded around Rs1,700 per 40-kg after crop figure fell below the 10m bales mark.

About 10,000 bales of fine lint from the southern Punjab ginneries changed hands and analysts fear the current price flare-up initiated by the textile cartel may not be contained from now onward.

“It is battle of wits between the spinners and the ginners to outwit each other on the price front,” cotton analyst Naseem Usman observes, adding “based on supply demand factors, spinners and mills may remain at the receiving end irrespective of imports”.

He said spinners had been playing a game of hide-and-seek with the ginners for the last couple of weeks by curtailing their daily intake in an apparent effort to unnerve them leading to panic selling.

But ginners are too shrewd to be outwitted as they held on to their positions rather than selling at the lower prices and finally won the battle of nerves, some others said.

They said textile sector is already in trouble owing to falling world demand for textiles and any further increase in prices could have a negative bearing on future exports.

Moreover, the local price flare-up could trigger sympathetic rise in world prices, making imports more expensive before the arrival of new crop from the lower Sindh cotton belt, they added.

Official spot rates were, therefore, again firmly held at the last levels and may be revised upward in line with the current price flare-up.

The following are some of the deals reported by the Secretary of Karachi Cotton Brokers Association: 4,000 bales from various Punjab ginneries at Rs2,800, 2,600 bales, Rahimyar Khan at Rs2,750 and 2,000 bales, Shujabad also at Rs2,750.