KARACHI, Sept 19: Cotton market on Wednesday showed firm trend as prices were quoted higher by Rs25 to Rs50 per maund followed by reports of an identical hike in phutti prices by growers.

Lower new crop arrivals of phutti into the ginneries up to Sept 15 totalled 1.012m bales, showing a modest fall of about eight per cent over the previous season’s figure also caused price hike, dealers said. Out of which mills have so far purchased 0.814m bales, leaving an unsold stock of 1.923m bales with the ginners, they added.

“Taking cue from the international markets, the local cotton market is heating up as growers seem to have decided to go by the international prices of lint and ginners are obliged to follow,” said a leading floor broker.

Although the official rate committee of the Karachi Cotton Association kept the rates pegged at the previous levels, but most of the deals finalised both in Sindh and Punjab varieties were done well above them depending on quality, he added.

The fresh price flare-up in New York cotton futures though did not have a bullish impact on the local prices, but in due course it will have owing to import-related perceptions, some others said.

Although the crop is said to be in line with the official target it is still below the annual consumption needs of the textile industry estimated around 17m bales on the lower side, they said.

The New York cotton futures seem to be heading toward new highs after a relative calm for the last couple of years thanks to successive good crops in the major cotton growing areas, keeping speculative traders out of the forward trading, they added.

Both the ruling October and the distant December contracts were quoted higher by 0.58 and 0.42 cents per lb at 62.25 and 64.85 cents respectively.

“Import of lint is becoming expensive each day for the spinners and mills,” market sources said, adding “panic mill buying in future will push local prices further higher”.

According to official figures spinners and mills have imported about 85,000 bales, (21,288 tons), during August 2007 to make up possible crop shortfall.

About 15,000 bales changed hands on Wednesday the notable feature was that Sindh type was again sold at a premium over its Punjab counterpart.

SINDH TYPE: 2,000 and 1,600 bales, Shahdadpur and Tando Adam at Rs2,885 to Rs2,900, 400 and 600 bales, Dadu and Mirpurkhas at Rs2,875, 1,000 bales, Jhole at Rs2,900 and 400 bales, Shahpur Chakar at Rs2,875 to Rs2,900.