KARACHI, Feb 26: Active trading was witnessed on the cotton market on Thursday as leading spinners resumed their covering operations against forward sales of cotton yarn after ginners lowered their asking prices.

After last couple of weeks sluggishness, instances of big-lot business were not buying as a leading group of spinners re-entered the market and lifted all the fine lots offered below Rs3,100 per maund.

Floor brokers said physical activity is expected to pick up further during next couple of sessions as ginners are not inclined to hold long positions in view of the spinners' reluctance to go beyond the price limit of Rs3,000 per maund for the quality lots.

The selling from the ginners was also encouraged from a bit bearish signals from the New York Cotton Exchange where futures are showing highly erratic price movements amid alternate bouts of buying and selling, they said.

Moreover, higher crop projections by the official crop assessment committee in its last meeting held in Multan, at 10m bales also seemed to have worked against the underlying sentiment.

"Ginners who have been firmly holding on to their unsold positions for the last couple of weeks on the perception of a lower crop are now trying to get out of their long positions fearing further slashing in prices", market sources said.

The big-lot business reflects that some of the leading ginners are trying to sell in part their large stocks well before the arrival figures of phutti for the fortnight ending Feb 29, 2004, followed by market talk of further pruning in the ruling prices, they said.

Arrival figures of phutti are due during the first week of March after the Ashura holidays. Meanwhile, reports from the export front indicate that most of the spinners have made forward deals for the export of cotton yarn and cloth for the final quarter ending June 30, and are in the market to cover their forward positions, they added.

New York cotton futures on Wednesday ended mixed. While the maturing March rose by 0.10 cents, the ruling May fell by 1.00 cent per lb at 69.10 and 70.16 cents per lb respectively.

Local official spot rates on the other hand were firmly held at the last levels amid active mill demand. Ready offtake was active as till late in the evening about 10,000 bales changed hands, the following being some of the notable deals: 1,000 bales, Shahdadpur at Rs2,700, 2,360 bales, Jhole also at this rate, 2,000 bales, Khairpur at Rs2,890 to Rs2,900, 3,000 bales, upper Sindh at Rs3,100, 400 and 600 bales, from Haroonabad at Rs3,050 and Rs3,150 respectively.