KARACHI, Dec 23: Cotton market on Thursday showed steady trend as ginners were not inclined to lower their asking prices from the current levels and spinners have no other option but to oblige them.

"The market seems to have confidently absorbed the negative fallout of both higher crop figure and the falling New York cotton futures prices," says a leading broker adding "the credit goes to leading ginners who preferred to hold on to their unsold stocks rather than selling it on the lower rates."

The market is literally being guided by supply and demand factors as ginners know that spinners and mills may need 13m bales plus to meet their annual consumption needs, some others said.

Higher export of textiles, competitive world prices, firm export orders tied to L/Cs and a sizable increase in mill consumption because of expansions will not allow spinners and mills to sit on the sidelines even a single day, they said.

Spinners said the post-TCP market could be the real test of ginners holding capacity and "we are awaiting the slow-down in TCP buying. In their opinions ginners may not be in a position to hold the current price line owing to allied fears with an expected production glut.

According to them, TCP high-ups will have to look at their inventories as by that time it would have exhausted its total allocation of Rs23 billion to procure an identical amount of lint at the prevailing prices.

The TCP has already hit the high mark of 2.2m bales and may need another 0.1m bales to meet its current target and the State Bank's decision to extend its limit will set the future price trend, market sources said.

Meanwhile, reports coming from the southern Punjab cotton belt indicate that the arrivals of phutti into the ginneries have almost dried up and ginners are mid-way through their commercial operations for the current season.

It was perhaps in this background that official spot rates were firmly held at the overnight levels, although fine lots were traded well above them. New York cotton futures on the other hand fell further by 0.90 and 0.61 cents per lb at 42.72 and 43.15 cents per lb for both the ruling March and the distant May contracts respectively. The following are some of the deals reported in the ready section:

SINDH TYPE: 1,000 bales, and 3,000 bales, Sardar Lund and upper Sindh at Rs1,925, 400 bales, Mirpurkhas at Rs1,625 and 400 bales, Nawabshah and 800 bales, Khairpur at Rs1,800.