KARACHI, Oct 5: Trading activity on the cotton market failed to pick up for the second session in a row as both the buyers and sellers awaited the negative fall-out of higher arrivals of phutti into the ginneries.

As a result, ginners held on to their positions entertaining higher price ideas, while on the other hand spinners and mills stayed on to the sidelines anticipating panic selling by the former in the backdrop of higher than market Expectations arrivals for the fortnight ended Oct 1.

Owing to the presence of Trading Corporation of Pakistan on the market, as second buyers, ginners are not worried over the developing situation as they have another option to lean back if prices fall further from the current levels owing to selling by some of their weaker links.

Floor brokers said the latest arrival figure of 2.2m bales is almost the double as compared to last fortnight, sending a wave of optimism among the spinners and mills in the hope of further decline in prices.

But Sindh ginners appear to be in no mood to lower their asking prices irrespective of reports of a higher crop and held on to their positions, they said adding "but ginners from the Punjab cotton belt are a bit shaky and obliged spinners at varied rates, the highest being Rs2,000 and the losers Rs1,950 per maund.

Reports of damage to standing crop in the lower Sindh cotton belt may have forced them to hold on to their positions amid fears that production target may not be achieved, they said.

A meagre unsold stock of 0.105m bales lying with the ginners shows their holding capacity and spinners' willingness to grab the floating stock of lint as unlike the previous season; no one among them is inclined to take even a calculated risk despite forecast of a higher crop, market sources said.

They said next couple of sessions would guide the future direction of the market based on supply and demand factors and the holding capcity of ginners. However, there is confusion among the growers who could not precisely decide how to react to higher crop ideas and maintain the price above the official support rate, they said.

Official spot rates were, therefore, firmly held at the last levels but on the other hand New York cotton futures recovered from the recent lows, up 1.25 at 49.25 cents per lb for the ruling October contract and 0.35 cents for the distant December settlement.

The following are some of the deals finalized in Punjab lint late on Monday evening: 800 bales, Khanewal at Rs1,975 to Rs2,000, 800 bales, Gojra at Rs1,950, 1,000 bales, Rajanpur at Rs1.975, 800 bales, DG Khan at Rs1,950, 600 bales, Sadiqabad at Rs1,970 to Rs2,000, 600 bales, Jalalpur at Rs1,975 to Rs1,980, 200 bales, Rahimyar Khan at Rs1,975 and 400 bales, Mian Channu at Rs1,975 to Rs1980.