KARACHI, Aug 6: Cotton market on Tuesday maintained a bullish outlook as pressure on ready supplies continues to inspire strong mill buying causing persistent increase in prices.

During the last couple days, lint prices have risen by more than Rs.100 per maund partly in sympathy with the phutti, which is now being delivered to the ginners well above the official spot rate of Rs.800 around Rs.900 per 40 kg.

“Our export parity levels both for cotton yarn and cloth have seriously affected because of the current price flare-up in lint prices,” spinners claim. “How to honour the firm letters of credit for the quarter ending Sept 30, appears to be a bit difficult if price continued to rise.”

Floor brokers said despite aggressive sales being made by the TCP to both the local and foreign buyers, prices on the local market continued to rise purely on supply and demand factors.

The crop may not be short as there are few reports of pest attack in selected areas and that too below economic injury level, the market seems to have been overtaken by the speculative forces, they added.

But some others say it appears to be the chain effect of increase in phutti prices by the growers. Having no other option but to buy phutti at the growers demanded prices, ginners pass on the burden of higher prices to the spinners, they said.

The market sentiment in part is also influenced bullishly by the higher world prices, which have limited the scope of imports to push the local prices down.

Last season, spinners imported about 1.2m bales after the world prices had fallen to 30 cents per lb or below, which had depressed the local market beyond growers competitive rates followed by TCP entry to support the falling market.

“Unlike the last season, grower appears to be now in a commanding position and is reportedly calling short from his field after holding back stocks of phutti,” one broker said.

Meanwhile, the highest bid against the TCP tender for local sales was reported at Rs.2,010 per maund, which is in line with the current crop being sold on the market.

After remaining static for the last couple of session, official spot rates were marked up by Rs.25 per maund in line with the ruling prices.

Ready offtake was modestly higher as till late in the evening about 5,000 bales changed hands as under:

NEW CROP SINDH: 100 bales, Mirpurkhas at Rs.2,075, 100 bales, Sultanabad at Rs.2,075, 200 bales, Kot Ghulam Muhammad at 2,075, 100 bales, Khipro at 2,100, 200 bales, Pithoro at 2,100, 100 bales, Burewala at 2,125 and 100 bales, Sardargarh at 2,125.