KARACHI, March 12: Cotton market on Wednesday consolidated the overnight gains as fears of an expected pressure on the ready supplies in the weeks to come did not allow spinners to take even a technical breather.

Physical business was, however, confined to a couple of lots because of delivery problems as the market will remain closed on Thursday and Friday on account of Muharram holidays. Ginners held on to their positions anticipating further increase in prices during the post-holiday sessions.

But leading spinners did not miss an opportunity and purchased all the fine lots offered by the ginners at Rs2,600 per maund, which comes to Rs2,965 after adding 15 per cent sales tax.

However, weaker links among the spinners though being in short positions were not inclined to pay more and lifted only those lots, which fell in line with their parity levels, dealers said.

Spinners claim the chief factor behind the current market sluggishness is the lower prices being offered by the foreign buyers of Pakistan cotton yarn.

The other inhibiting factor is the fear of war as the US is determined to attack Iraq irrespective of the Security Council resolution and threat of Russian veto.

“Some of our trading partners of cotton yarn are reluctant to open fresh letters of credit because of fears of interruptions in supplies if the US attacks Iraq and are awaiting fresh development on Gulf issue,” one spinner says adding “the unsold inventories of yarn and cloth are rising each day causing liquidity problems for the entire textile sector.”

An added to it is recent sharp increase in lint prices and fears are that if the supply situation did not improve during the next couple of weeks, a serious crisis may develop in the major foreign exchange earner, he adds.

Meanwhile, reports coming from the upper Sindh and the southern Punjab cotton belts indicate that ginners are in no mood to lower their asking prices for the fine lots and mills are obliged to follow their lead.

Official spot rates did not show any change and were firmly held at the last level of Rs2,535 per maund, although in the ready section some of the deals were finalized according to quality premiums.

New York cotton futures on the other hand showed fractional rise of 0.3 and 0.1 cents per lb for both the ruling May and the distant July settlements at 58.06 and 59.00 cents per lb respectively.

The notable feature was that the matured March contract was rung off the board slightly below the 50 cents per lb mark and trading resumed in the forward July delivery along with the May settlement.

Ready business was slow because of delivery problems and till late in the evening about 1,500 bales, changed hands, mostly from the upper Sindh and southern Punjab ginneries between Rs2,550 and Rs2,600 per maund.