KARACHI, Feb 3: Cotton prices on Monday stayed firm as arrival figures of phutti into the ginneries were well below the market expectations and brokers fear pressure on ready supplies during the weeks to come.

The market witnessed panic buying as some leading spinners and mills having large export orders tried to grab the floating stock of lint and lifted all the lots offered by the ginners at the higher price of Rs2,300 per maund.

The interesting feature was that some of the exporters offered the same rates to ginners and purchased about 2,500 bales between Rs2,280 and Rs2,300 per maund without 15 per cent sales tax.

Ready offtake was the chief victim as both the sellers and the buyers have their own future price perceptions and held on to their positions maintaining a status quo at least for the near-term, dealers said.

But ginners on the other hand were a bit optimistic about the developing situation on the cotton front as leading among them entertain higher price ideas in the backdrop of a crop shortfall.

According to fortnightly phutti arrival figures released by the Pakistan Cotton Ginners Association (PCGA), phutti equivalent of 9.432m bales arrived into the ginneries up to Feb 1, 2003, as compared to last year’s comparable figure of 9.011m bales.

Although the total arrivals showed an increase of 4.67 per cent as compared to last year, rumours that next fortnightly figure could be much lower as the growers have already cleared their unsold positions.

“What seems to have sent shock waves among the spinners are the rumours that the total crop may not touch the high mark of 10m bales and a substantial fall in the unsold stock at 1.710m bales as compared to last year’s 1.939m bales”, brokers said. Of the total, spinners have purchased 7.613m bales, over half a million bales more than the last year, while 0.111m bales went to the credit of exporters, leaving an unsold stock of 1.710m bales with ginners.

Cotton analysts said sharp fall in arrivals has changed the price outlook and indications are that spinners may have to buy expensive lint in the weeks to come, which will lower their competitive edge on the world markets for textiles. Official spot rates were maintained at the previous levels but in the ready section most of the deals were finalized at the higher levels.

Ready offtake was modest totalling about 7,000 bales, the following being notable among them: 1,200 bales, Shahdadpur at Rs2,280 seedstuff, 1,400 bales, Rajanpur at Rs2,300, purchased by exporters, 2,000 bales, upper Sindh at Rs2,300 and 1,000 bales, Khanpur at Rs2,275.