KARACHI, June 26: Physical business on the cotton market on Wednesday shrank to modest proportions as ginners and spinners were locked in a price war but appears to be a no-win situation for the both.

The falling unsold stocks have pushed the ginners to a dictating position as far as the daily price fixation is concerned. However, in the final analysis both have to find out a meeting ground to keep the wheels moving, says a broker.

For the second session in a row brokers did not report any physical deal, although reports coming from the upper Sindh and southern Punjab cotton belts indicate that leading spinners are out to grab the floating stocks mostly at the ginners’ asking prices.

Unconfirmed reports indicate that fine lots are being sold around Rs2,000 per maund as spinners are claimed to be after each good quality lot as they need it against forward sales of higher counts of cotton yarn.

Though a bit late the current price flare-up caused chiefly by persistent increase in sympathy with future rates enabled some of the ginners, notably those holding long unsold positions, to recoup in part the early season losses, market sources said.

New York cotton futures maintained their upward drive boosted by fears of global shortages of lint and were quoted further higher by 0.32 and 0.55 cents per lb at 43.80 and 46.15 cents per lb for both the ruling July and the distant October settlements.

What worries spinners are the reports that unsold stocks lying with the ginners may not be enough for a month’s mill intake, says a broker adding that could well mean further increase in prices before the new crop arrives.

Meanwhile, reports coming from the lower Sindh cotton belt where sowing is done earlier, indicate that picking of new crop phutti has been resumed in more areas.

Ginners, however, claim that pace of arrivals of phutti is too small for resuming new crop ginning operations at least for another two weeks or so. The new crop lint is expected to be available by the first week of August or late July.

Unlike the previous season there are no reports of phutti buyers from the central Punjab cotton and as a result, rates are slightly above the official procurement price of Rs800 per 40 kg.

Meanwhile, private sector have registered export contracts for another 1,637 bales, sold to Thailand and some other countries, the foreign sales till June 24, being 0.194m bales.

Official spot rates were again quoted at the previous levels but in the ready section some of the deals were done well above them.

Ready offtake was modest totalling 2,000 bales mostly from the southern Punjab cotton belt.