KARACHI, March 6: Cotton prices soared to a new peak level on Thursday and indications are that short supply and bullish foreign markets will continue to fuel a price flare-up in the coming sessions also.

An idea of panic mill buying may well be had from the fact that some fine lots from a Sindh ginnery were traded as higher as Rs3,650 per maund, and as claimed by some of the leading brokers this was an all-time higher rate so far.

But an average price at which about 20,000 bales changed hands was Rs3,500 for fine lots, both from the Sindh and southern Punjab ginneries.

“I don’t think the current price flare-up, fuelled by short supply, could be contained,” said a leading broker Mohammad Adil, adding “a progressive daily rise could push it to new all-time highs in the coming weeks.”

The short crop apart, what seems to have aggravated the supply situation is steep increase in the New York cotton futures on speculative trading, which in turn fuelled price-hike the world over, cotton analyst Naseem Usman said.

The New York cotton futures showed fresh modest rise after limit-gains for the last couple of sessions, up by 0.64 and 0.85 cents per lb at 89.28 and 91.11 cents per lb, respectively.

Spinners cited reports that some of the Indian cotton exporters have refused to honour their export commitments made under the forward deals and are said to be seeking price revision in line with the international market.

They said it was not a single factor, but a combination of supporting factors, which could keep prices in the higher ceiling leading to closure of more textile and spinning mills were creating problems on the export front.

It was in this background that the official spot rates were also quoted higher by Rs100 per maund at Rs3,640 per 40 kg f.o.b. basis.

Mill ready off-take was on the higher side totaling about 20,000 bales, the following being some of the notable deals:

SINDH TYPE: 600 bales, upper Sindh at Rs3,600; 800 bales, Mehrabpur at Rs3,550, 2,200 bales, Khipro and 1,400 bales, Daharki at Rs3,500.