KARACHI, Nov 5: Trading activity on the cotton market on Monday was relatively slow as spinners and mills made modest covering purchases apparently assessing the impact of emergency on the cotton trade.

Prices, however, remained stable around the weekend levels despite sharp fall in the daily physical business as a section of spinners awaited fresh development on the political front in the backdrop of feared protests against the imposition of the emergency, said a floor broker.

But some others said spinners and mills awaited the negative fallout of larger than expected unsold stock of over a million bales lying in the godowns of ginners.

“Owing to go-slow policy adopted by the spinners and mills to forestall further increase in prices, the unsold stocks of lint has risen sharply higher during the last fortnight,” they added.

According to official figures released by the Pakistan Cotton Ginners Association (PCGA), the arrivals of phutti into the ginneries stood at 4.231m bales up to Nov 1, 2007, out of which spinners had purchased 3.089m bales and private sector exporters lifted 0.519m bales, leaving an unsold stock of 1.093m bales.

The figures did not point to a short crop at the mid-season but general perception is that the shortfall will be visible toward the end of the season, market sources said.The higher arrival figures and a considerable decline in mill buying has halted the price flare-up for the time being but what is next is not clear at this stage, they added.

Official spot rates were firmly held at the weekend level of Rs3,075. However stray business was done at well higher rates but there was no big-lot deal was reported.

The following notable deals were reported on Monday evening:

SINDH TYPE: 800 bales, Shahdadpur and 600 bales, Tando Adam at Rs3,075 to Rs3,100.