KARACHI, June 10: Cotton market on Tuesday lacked normal trading interest as, for the second session in a row, physical business remained at a low ebb in the absence of strong mill demand.

Floor brokers said the perception that the spinners and mills will be back in the market during the post-budget sessions remained an elusive goal.

The developing post-budget situation on the cotton front despite a number of incentives given to the textile sector to boost exports now certainly worried ginners as they want to sell their unsold stocks before the arrivals of the new crop from the lower Sindh cotton belt, they said.

But spinners and mills on the other hand are not inclined to re-enter the market to cover their positions against the forward sales of cotton yarn owing to higher asking prices by the ginners.

According to market sources, ginners still hold an unsold stock of about 0.170 bales, mostly of fine lots and did not know how to dispose it of in the absence of buyers.

“Ginners’ selling prices are much higher than our export parity levels for cotton yarn and until they come to competitive level, mills and spinners may remain conspicuous by their absence,” commenting on the current standoff in cotton trading says a leading spinner.

But some others said the future price outlook will largely depend on the holding capacity of the ginners and if any one of them lowered his price below Rs2,500 per maund, others will follow suit.

Dealers said the world cotton price may not be that cheaper as the spinners may expect and if the current pick in demand is any indication it may become more expensive in the weeks to come.

After having fallen below the 50 cents per lb level last week, the New York cotton futures had recovered sharply and are being quoted at 52.21 and 53.90 cents per lb for both the ruling July and the distant October settlements, up 1.45 and 0.60 cents respectively.

Spinners still need another 0.2m bales to cover up their short positions and the local unsold stuff could well be the centre of activity during the next couple of sessions, dealers said.

There was, therefore, no change in the official spot rates for the second session in a row in the absence of ready business. Brokers said some of the local mills were buyers for stray lots but no deals was finalized till late in the evening.