KARACHI, June 17: Active trading was witnessed on the cotton market on Monday as leading spinners continued to build up long positions at the current level amid fears of short supply before the arrivals of new crop.

The budget was generally welcomed by the cotton traders as it did not levy new taxes, barring on the import of oilseeds to limit their imports and give protection to the local industry, dealers said.

It may have some indirect impact on the cotton trade spilling over from the textile sector but it could be positive rather than negative, they added.

The interesting feature was that leading spinners who have surplus lint beyond their annual consumption needs also rode the bandwagon followed by increase in selling prices.

A big lot of 3,000 bales changed hands between spinner to spinners, sending bearish signals among the ginners but held on to their positions.

According to the market sources, leading spinners had purchased substantial number of bales after prices had fallen to Rs1,250 per maund late last year before the intervention of the TCP and are now selling it at much higher rates.

“Why should spinners add overheads to lint when they could get much higher prices after selling it to their needy counterpart,” they added.

However, ginners are not worried over this developments as in their opinion supply and demand factors will finally prevail. Moreover, an unsold stock of about 0.4m bales may not pose any problem in the backdrop of higher world prices and an increase in yarn prices.

“A lot of spinners are still short of their annual needs and they are expected to remain active buyers till the end of the seasons as most of them operate on almost daily basis owing to liquidity problems,” says a leading broker.

There was no change in the official spot rates but in the ready section most of the deals were done well above them.

Ready offtake was active as till late in the evening about 10,000 bales changed hands as under: 3,000 bales of Mandodaro at Rs1,925, 3,000 bales, MNH-93 Sawgin, Punjab mill-to-mill at Rs1,900, 440 bales, Vehari at Rs1,800, 300 bales, Khror Pacca at Rs1,650, 400 bales, Mailsi at Rs1,850 and 200 bales at Rs1,775.