KARACHI, July 12: Cotton market on Saturday maintained a firm outlook thanks to active covering purchases by the spinners and mills at the inflated rate of Rs4,000 per maund followed by reports of forward export deals with India by the private sector exporters.

The fresh rise in lint prices was attributed to strong mill buying for no apparent panic reasons as so far there are no negative reports about the size of the crop or pest attack, market sources said.

Leading among the spinners are not inclined to take supply risks as the cotton crop is said to be too risky to rely on it until the final figure is out, they added.

But the chief of Karachi Brokers Forum Naseem Usman thinks the current price flare-up both in lint and phutti prices was caused by the entry of private sector exporters in the cotton trade at this early stage of the season.

He claims some of them have already sold 5,000 bales of the new crop to India at unspecified FOB rate, which seems to have caused the current price flare-up.

Under the new trade policy both the import and the export of lint is free but previously exporters were not allowed to enter the market until the size of the crop is clear and spinners and mills being the first purchasers had covered their forward positions, he added.

The major spinners’ thrust again remained on the Punjab type, which is readily available as about three dozen ginneries have so far resumed their operations and turning out daily about 10,000 to 15,000 bales of new crop lint, market sources said.

Owing to increase in lint prices to new high of Rs4,000 per maund, phutti rates also showed sympathetic increase and are being quoted at Rs1,750 to Rs1,800 in Punjab and Rs1,850 to Rs1,900 per 40 kg in the lower Sindh cotton belt where some ginneries have also resumed new crop ginning operations, they said.

New York cotton futures stayed firm above the 70-cent per lb level, fractionally higher by 0.02 and 0.01 cents at 70.63 and 73.59 cents per lb for both the ruling October and the forward December settlements, respectively.

But on the other hand official spot rates were firmly held at the last level of Rs3,650 for average quality lint, while in the ready section most of the deals were done Rs350 per higher than them.

The following are some of the deals, which gone through late in the evening: 200 bales, Sanghar at Rs3,985, 200 bales, Pir Mahal and 400 bales, Gojra at Rs4,000, 400 bales, each Sahiwal, Chichawatni, Pak Patten Haroonabad and Mian Channu at Rs3,950 to Rs4,000, 600 bales, each Arifwala and Burewala also at Rs3,950 to Rs4,000, and 200 bales, Hasilpur at Rs3,925.