KARACHI, May 31: Trading on the cotton market on Monday resumed on a firm note as ginners were not inclined to lower their asking prices, anticipating further increase before the new crop from the lower Sindh cotton belt arrives.

"Ginners are banking on the lower unsold stocks lying in their godowns as compared to mill demand before the new crop makes its debut sometime early July and are holding on to their positions," brokers said.

But the last couple of sessions of physical business reflects that spinners and mills are not in a mood to go beyond the Rs3,200 level and purchase only those lots which are offered around this level, they said.

After having made larger forward buying, the spinners are to operate in line with their export parity levels as they have to sell their end-products on the world markets at competitive rates.

That is perhaps why one day they lift all the lots offered by the ginners for sale, while the very next day they keep to the sidelines and do not bid for a single lot. "Both the ginners and the spinners are trying to outwit each other on the price front but it appears to be a no-win situation for the both, although the former has some edge over the latter because of lower unsold stock," market sources said.

They said the hide-and-seek game between the two would continue in coming weeks also as the ginners would try to sell the idea of an imminent price flare-up. According to official lint export figures, private sector exporters have made forward deals for 0.214m bales up to May 23, and had physically shipped 0.182m bales against the total till April 30, 2004.

Meanwhile, reports coming from the upper Sindh and southern Punjab cotton belts indicate that sowing of new crop is nearing completion in some of the areas, while it will be completed in other areas by June 15.

Local ginners said the new crop sown earlier in the lower Sindh cotton belt was progressing well as there were no reports of pest attack because of extremely hot weather in the entire cotton belt. Official spot rates were firmly held at the last levels, although stray business was finalized on the quality of lint, ranging between Rs2,700 and Rs3,200 per maund, both on lower and higher sides.