KARACHI, Jan 17: Physical business on the cotton market on Thursday shrank to modest proportions owing to delivery problems ahead of Ashura holidays.

There was, however, no change in ruling prices as both fine and inferior lots were traded around the overnight level of Rs3,400 and 3,250 per maund.

Floor brokers said normal activity is expected to resume by next Monday as by that time there may not be any delivery problems at normal rates.

They said spinners and mills are worried over the steep increase in New York cotton futures, which are heading to set new highs after about two decades amid fears of short crop in some of the major producers.

“The future lint imports may not be that cheap and could have negative impact on textile export target,” said a leading spinner adding “the ruling price of over 71 and 73 cents per lb for both the ruling March and the May contracts on the New York Cotton Exchange after adding to other cost is not commercially viable to go for it.”

That could upset the textile export projection for the current fiscal, he said, adding “those who made forward deals below 65 cents per lb may also need more imports to see the year through,” they added.

The next couple of weeks may be very crucial for the textile industry both on supply and price front and how the leading export sector performs will have both positive and negative impact on the entire economy, market sources said.

Official spot were, however, again held unchanged at the previous level of Rs3,200 per maund for an average quality of lint for the sixth session.

New York cotton futures on the other hand showed a modest decline of 0.38 and 0.47 cents per lb for both the maturing March and the distant May contacts at 71.31 and 73.03 cents per lb, respectively.

Mill ready off-take was light, totaling about 10,000 bales as under:

SINDH VARIETY: 1,000 bales, Gothki, Dharki and Mirpur Mathelo at Rs3,350 to 3,400 per maund.