KARACHI, Sept 10: Cotton market on Tuesday showed firm trend as spinners continued to cover their positions against forward sales of cotton yarn to Far Eastern buyers and other traditional importers.

Bulk of the business was transacted on an average price of 2,000 per maund, which showed an impressive improvement over the last couple of days ready rates.

The big-lot business signals a major change in the future price outlook but much will depend on the holding capacity of the growers and their willingness to change the current status quo.

Floor brokers said apart from fresh import orders for yarn, the other stimulating factor behind the revival of strong mill buying was said to be a competitive increase in their profit margins.

“The revival of foreign demand at competitive rates has changed the future market outlook and we are back in the arena,” says a leading spinner adding “but any further rise in prices above the 2,000 rupee level could work against our interests on the export front.”

During the last couple of sessions, spinners and mills have purchased about 25,000 bales mainly from the lower and central Sindh ginneries but they are reluctant to go for the Punjab lint in a big way at this stage because of quality reasons.

That is perhaps why the Punjab lint is being sold at par or slightly below the ruling rates of its Sindh counterpart.

The satisfying feature is that growers are not holding back their stocks of phutti and steady inflow into the ginneries has restored a needed equilibrium in the counter-market forces.

Official spot rates were further raised by Rs.15 per maund to Rs.1,965, although most of the deals in physical trading were done well above them.

New York cotton futures also resisted fresh decline as both the ruling October and the distant December settlements rose by 0.5 and 0.12 cents per lb at 43.39 and 45.24 cents per lb respectively.

Phutti rates were quoted around Rs.870 to 875 for Punjab variety and Rs.860 to 900 per 40 kg for Sindh type.

Ready offtake was active as till late in the evening Secretary of Karachi Cotton Brokers Association Naseem Usman reported the following deals:

SINDH VARIETY: 2,000 bales, Shahdadpur at Rs.2,000 and 400 at 2,025, 2,000 bales, Tando Adam at 2,000 and 200 at 2,10, 600 bales, Sanghar at 2,000, 200 bales, Mirpurkhas at 1,950, 400 bales, at 1,975.