KARACHI, Oct 10: Physical trading on the cotton market on Wednesday showed a sizeable contraction as spinners took a technical breather and withdrew to the sidelines followed by spate of conflicting rumours from Islamabad.

Although there appeared to be no truth in the rumours as they turned out to be the brain-child of some vested interests, they took their toll in the form lower traded volume.

Low ready volumes also indicate ginners reluctance to sell at the lower bidding rates and their holding capacity at least for the near-term.

The market is passing though a consolidation phase and could move both ways before following a set course, notably after picking operations of phutti resume in the southern Punjab cotton belt, dealers said.

Floor brokers said the market psychology had undergone a major change in the recent past as reports that the Trading Corporation of Pakistan will purchase one million bales has reinforced their perception about the market revival in the presence of three buyers.

Among the three, exporters are not making aggressive buying because of falling world prices, spinners and the TCP are active to ensure a fair price to the grower, they added.

Market sources said leading spinners had chalked out a massive covering programme at the prevailing rates but rumours kept them away at least for another day.

“Spinners and mills have the reasons to be in the market followed by reports of revival of foreign demand for textiles, “they added. “And that forced them to cover their positions against forward sales of cotton yarn and cloth”.

They predict the market is sure to recover from the current lows as spinners have to go a long way to cover their annual consumption needs and could push prices further higher in coming weeks.

However, spinners’ major thrust remained confined to quality lots from the lower and central Sindh lint, which again fetched higher price as compared to its long staple lint from the central Punjab ginneries.

Official spot rates remained pegged at the last levels, but New York cotton futures came in for renewed selling and were marked down by 0.45 and 0.39 cents per lb at 30.65 and 31.65 cents per lb for both the maturing Oct and the ruling Dec settlements respectively.

Ready offtake shrank to modest proportions as till late in the evening over 2,000 bales changed hands at a uniform rate of Rs.1,600.00: 400 bales of Tando Adam at Rs.1,600, 600, 700 and 200 bales each from Shahdadpur, Sanghar, Mitari and Khipro were also done at this rate.