KARACHI, April 5: Active trading was witnessed on the cotton market on Wednesday as spinners resumed short-covering at the current levels fearing further increase in prices. Lower crop ideas as compared to mill annual consumption needs appeared to be the chief factor behind the return of the prodigal son, a broker commenting on the resumption of buying by the mills and the spinners said.

The other contributory aiding factor was lower unsold stocks of lint lying in the ginneries with varietal differences and the price factors as compared to foreign prevailing foreign rates,” he added.

The unsold stock of a million bales lying with the ginners said to be not enough to meet the rising demand of the organized mill sector. Out of the total crop arrivals, mills and spinners have so far purchased slightly above 11m bales whereas the annual demand is estimated around 15m bales, showing a big supply gap, market sources said.

“The unsold stock of about 0.4m bales of the TCP could come to the aid of the textile sector and that is perhaps why they are actively participating in the TCP tenders,” they said.

In the backdrop of rising textile exports, which has shown an increase of well over 20 per cent during the first half of the current fiscal, spinners need supplies at competitive rates, they added.

“In the coming weeks spinners may have to keep a judicious balance between the supplies and their export parity level owing to an anticipated pressure on future supplies”, some others said.

Official spot rates were again held unchanged but most of the deals finalized in the ready section were done according to quality premiums.

Mill ready off-take was on the higher side totalling about 15,000 bales as under: 3,600 bales, Rahimyar Khan and 1,600 bales, Khanpur at Rs2,475, 1,400 bales, Feroza at Rs2,340, 2,000 bales, Mehmoodabad at Rs2,425, 400 bales, Sadiqabad at Rs2,400 and 800 bales, Sanghar at Rs2,325.