KARACHI, July 23: Cotton prices rose further on Wednesday as some of the deals were done as higher as Rs4,200 per maund amid nervous mill buying followed by reports of pest attack in the entire cotton belt of Punjab.

But in contrast, world prices are progressively falling under the lead of New York cotton futures, which fell below the barrier of 70 cents per lb on selling prompted by higher crop projections in the US.

As a result, a private sector exporter sold 200 bales to a local mill at Rs4,200 as it is more profitable to sell than the foreign markets, said an exporter.

But local price flare-up appears to be indigenous and may not have any relevance to the world situation at least in the near term as the local prices are guided by the supply and demand factors, some spinners said, adding: “although cheaper world prices significantly brighten the chances of import at competitive rates”.

They attributed the current panic mill buying to crop surveys conducted by their monitoring cells, pointing to damage by the pest attack, and fears of substantial shortfall in the total production, notably in Punjab.

However, the crop in Sindh is largely safe barring stray instances of attack in lower parts of the province and is expected to be according to official target, market sources said, adding Punjab may suffer production losses as it did last year too.

Leading spinners and mills did not take even a technical breather to have an overview of the situation developing on the new crop front and lifted all the lost offered by the ginners irrespective of asking prices, ginners said.

“It is widely speculated that the new crop will be lower by 10 to 12 per cent of the target of 11.5 million bales owing to reported extensive damage to the standing crop well before it could reach the flowering stage,” said a cotton analyst, adding: “it is very unusual that the pests attack the crop at this formative stage”.

Official spot rates were quoted further higher by Rs25 per maund at Rs3,875 but on the other hand New York cotton futures fell by 1.13 and 1.22 cents per lb at 68.5 and 71.56 cents for both the maturing July and the forward October contracts, respectively.

Mill ready off-take was on the higher side amounting to about 10,000 bales as under:

SINDH TYPE: 200 bales, and 100 bales, Shahdadpur and Hyderabad at Rs4,200, 200 and 400 bales, Tando Adam and Sanghar at Rs4,150.