KARACHI, April 20: Cotton prices on Thursday showed a modest rise as ginners held on to their unsold positions, awaiting the return of spinners and mills followed by reports of lower than market perception acceptance of bids by the TCP against its tender for 30,000 bales.

But later in the evening a modest deal from an upper Sindh ginnery was reported at the season’s peak level of Rs2,510, indicating ginner perceptions of an imminent price flare-up.

Although both foreign and local buyers have offered bids for about 80,000 bales against the TCP tender for 30,000 bales, the rates quoted by them were much lower as compared to local as well as foreign prevailing prices.

According to official sources, some of the highest bids for modest quantities were accepted by the TCP, while others were asked to match counter offers.

The ginner perception that spinners and mills would be back on the local market and resume their covering operations for the local stuff heated the market, floor brokers said.

“We foresee a price-war between the ginners and spinners in the coming weeks as the former are thinking in terms of a possible price flare-up based on supply and demand factors,” they added.

The unsold stock of 0.988m bales in ginners’ godowns is too small a figure to cater to the mill demand before the new crop arrives in the market, which could lead to fresh increase in prices in the coming weeks.

But some others said that an unsold stock of about 0.2 million bales with the TCP could play a price stabilisation role and check any undue price flare-up after having floated quick tenders to dispose of the entire surplus.

It was in this background that official spot rates were revised upward by Rs25 at Rs2,425 as some of the spinners were back in the market on a price probing mission and ginner mood.

New York cotton futures also showed fractional rise of 0.5 cents per lb for both the ruling May and distant July settlements, respectively.

Ready offtake was light totalling about 4,000 bales, the following being some of the notable deals: 400 bales, Khairpur at Rs2,510; and 2,600 bales, Sadiqabad at Rs2,450 to Rs2,475.