KARACHI, July 5: Trading activity on the cotton market on Thursday remained relatively slow as spinners stayed on the sidelines owing to higher asking prices by the ginners.

However, some brokerage houses reported stray lots from the current crop did change hands at a bit lower rates as spinners and mills were not inclined to go for new crop from the central Punjab, which is being offered around Rs3,000 per maund.

Some of the spinners are buying low-mix lots both from the central Sindh and Punjab ginneries, which is available at lower rates for mixing it with the fine lint to lower the production costs and to remain competitive on the world markets, floor brokers said.

Spinners said the current price flare-up has not only upset their export parity levels but also scared away foreign buyers as they are not inclined to raise prices of textiles in line with the steep rise in lint prices.

“There are fears that some of the previously signed textile export contracts for the first quarter of the current fiscal may not be honoured owing to local price flare-up,” they said.

Both the local as well as foreign higher prices have made operations very expensive and future outlook appears bleak as far as export sector is concerned, they added.

“What worries us more are the reports that recent rain has damaged the new crop followed by pest attack and market talk that the next year’s crop target may not be achieved,” said a leading spinner.

He said crisis-like situation was developing on the cotton front just at the start of the new fiscal and fears linked to supply and demand factors would continue to haunt spinners and mills.

Official spot rates were held unchanged at the overnight level of Rs2,650 but some of the deals in the current crop were done according to quality premiums.