KARACHI, March 7: An imminent flare-up in local cotton prices was halted on Friday following reports of above-limit-loss in New York cotton futures on heavy selling by the fund traders.

The May and the July contracts on New York Cotton Exchange (NYCE) were quoted lower by four cents each at 85.28 and 87.11 cents per lb on Thursday.

Market sources said that the single-session limit loss/rise on NYCE was 2.50 cents after which trading was temporarily suspended to allow the clearance of outstanding dues.

In the local market bulk of the deals were finalised around the overnight levels depending on quality of the lint, but market sources said it could be a temporarily relief for the spinners and mills as finally supply and demand factors will prevail.

“The textile industry could get major relief provided the Indian exporters honour their commitments for supplying 1.4 million bales against which Letters of Credit (LCs) have already been opened,” said a leading spinner.

This big quantity could keep the local textile industry afloat and bail it out from the hot waters if the Indian exporters strictly adhere to business norms, he added.

“We are not inclined to go for litigation on the issue and are in search of new source of supply even at the current higher levels despite the fact there is no possibility of fall in prices,” some others said.

“World cotton is now in the tight grip of speculators who have enormous funds at their disposal and are busy in tilting the prices in their favour in the coming weeks also”.

The official spot rates were firmly held at the overnight level of Rs3,350 per maund for an average quality, while fine lots were done well above this rate.

Ready off-take was active totalling about 20,000 bales, the following being some notable deals:

SINDH TYPE: 2,000 bales, Mehrabpur at Rs3,450 to Rs3,550, 400 bales, Nayabad at Rs3,500, 200 bales, Sanghar at Rs3,250, 400 bales Head Bakani at Rs3,500.