KARACHI, Aug 26: Active trading was witnessed on the cotton market on Tuesday as spinners and mills covered their forward positions at the current lower levels amid an actively traded session for the second day in a row.

Buyers were in a hurry to grab the floating stock at the current rates for unknown reason, said a floor broker.

However, the current average rate of slightly above Rs4,000 per maund was said to be in line with the export parity level of the textile sector and no one among them was inclined to take supply risk in the backdrop of an uncertain final production figure.

Reports of an extensive pest attack in the Punjab cotton belt appear to be the chief factor behind the current panic-buying by mills amid fears of a fresh price flare-up if the crop is below the target, they said.

They said the crop position would be known by the end of the next month when the picking operations of phutti are resumed in the upper Sindh and southern Punjab cotton belt and the damage if any to the crop owing to pest attack.

Another 25,000 bales changed hands at an average rate of Rs4,100 per maund, but the Punjab lint was sold at modest premium of Rs25 per maund over its Sindh counterpart.

Cotton analysts said spinners were also probing the possibility of resuming foreign buying at the current rates to keep their annual supply need in order.

The continued fall in the New York cotton futures, which were quoted lower by 0.51 cents per lb for both the ruling October and forward December contracts at 66.91 and 69.12 cents respectively, had made imports competitive.

Official spot rates were marked down by Rs75 per maund but in physical trading most of the deals were done well above them on late recovery caused by higher mill demand.

The following notable deals were reported to the KCA by the brokers.

SINDH TYPE: 3,000, 2,000 and 400 bales, each Shahdadpur, Tando Adam, Sinjoro, Jhole at Rs4,100, 2,000 bales, each Sanghar, MirpurKhas and 600 bales, Shahpur Chakkar at Rs4,075 to Rs4,100.

PUNJAB VARIETY: 800 bales, Gojra at Rs4,125, 500 bales, Bahawalnagar at Rs4,050 to Rs4,075, 1,000 bales each Burewala and Mian Channu, at Rs4,100, 600 bales, each Arifwala and Pir Mahal and 400 bales, Hasilpur also at Rs4,100.