KARACHI, May 23: Physical activity on the cotton market failed to pick up on Thursday as fears of an Indian attack along the LoC in Kashmir kept spinners out of the trading arena.

Indian prime minister’s threat that “time has come for a decisive fight” also worked against the sentiment as spinners and mills thought it could be the prelude of an imminent attack.

“Reports from the borders are disturbing and did not allow resumption of normal trading activities,” floor brokers said adding “until the tension eases, physical activity may remain sluggish.”

Owing to tension on the borders and the prevailing war hysteria, New York cotton futures have risen sharply over the last couple of sessions amid fears of disruption in supplies from Pakistan, they added.

Floor brokers said spinners may be a least worried over the current war hysteria as their stock position is claimed to be fairly comfortable and could lead them through the current season.

According to official figures they have purchased about 9.4m bales from the local ginners and have imported about 1.2m bales from the foreign markets after world prices fell to 30 cents per lb.

Another factor, which ensures them sufficient supplies for the remaining three months of the current season is that the TCP has cancelled purchase contracts for about 0.154m bales as ginners failed to supply the contracted lots according to its quality standards.

As a result, spinners and mills have restricted their buying operations to only those lots offered to them by the ginners at their named prices, some of fine lots still available with them being an exception.

Dealers said a lot of 700 bales from a Punjab ginnery, for instance, was sold at Rs1,750 per maund as against the official price of Rs1,575 and prevailing average market rate of Rs1,550.

Meanwhile, private sector exporters have registered foreign sales contracts for 1,210 bales, sold to Indonesia and Bangladesh on May 20 and 21, with the Export Promotion Bureau (EPB) pushing the total figure of foreign sales to 0.151m bales, against which 0.119m bales have already physically shipped to the importing countries.

Official spot rates remained static at the previous levels but the New York cotton futures posted fresh sharp rise of 0.70 and 0.85 cents at 37.15 and 39.55 cents per lb for both the ruling July and the distant October settlements.

Ready offtake was light at 1,500 bales as under: 800 bales, Dharki at Rs1,575 and 700 bales, Bagho Bahar at Rs1,750.