KARACHI, July 31: Cotton prices on Tuesday rose by Rs25 to Rs50 per maund in physical trading as ginners held on to their positions most of the time anticipating further pressure on ready supplies.

Floor brokers, however, ruled out the possibility of an imminent price flare-up and panic-buying by mills and spinners as they may not go beyond their export parity levels despite short crop in near future.

Ginners said the cotton economy was now in the hands of leading growers who were not inclined to sell phutti below their asking prices having a negative impact on the ready supplies.

Ginners fear that phutti prices may rise further higher from the prevailing Rs1,400 per 40 kg plus as there was a loud whispering among the progressive growers about the figure beyond Rs1,500.

Spinners claimed that some of their weaker links had already stopped processing activities, while others were awaiting a fall in prices after the supply position showed an improvement.

But one thing now appears certain that higher cost of production could hit textile export which would have negative impact on the foreign exchange earnings, they said.

“The cotton economy is heading for a big crisis as a short crop has created many problems both for the ginners and the spinners and the chief beneficiary in similar situation is always the grower,” said a leading spinner.

The market sentiment was also influenced by the higher New York cotton prices which rose by 0.94 and 1.05 cents per lb at 62.49 and 64.55 cents for both the ruling October and the forward December contracts respectively.

Local official spot rates were held unchanged at Rs2,900 per maund but ready business was being transacted well above them.

Mill ready offtake was light totalling about 3,000 bales as under:

SINDH TYPE: 400 and 200 bales, each Sultanabad at Rs3,125 and 100 bales, Sanghar at Rs3,100.