KARACHI, Dec 24: Cotton prices on Wednesday posted fresh gains on panic mill buying amid fears of shortage of fine lint in the backdrop of aggressive procurement operations by the Trading Corporation of Pakistan (TCP) during the last couple of sessions.

Reports that the TCP has purchased well over 0.325m bales seem to send shock waves among the spinners and mills, who also indulged in panic buying followed by a fresh price flare-up, floor brokers said.

Some of the deals were done as higher as Rs3,050 per maund, about Rs150 per maund higher than the previous levels, indicating that the current run-up may continue, they said.

An idea of big-lot business may well be had from the fact that a single lot of 11,000 bales from the upper Sindh ginneries changed hands at Rs3,000 to 3,100 per maund on LC basis, they added adding exporters are said to be involved in the deal.

“The price war between the spinners and the TCP appears to be at its peak,” said a cotton analyst adding: “Textile sector may feel the pinch of higher local rates in the coming weeks.

The cotton trade is heading for a big change in the coming weeks based on supply demand factors and higher world prices followed by reports of revival of foreign demand early new year, he added.

The other supporting factor will be lower crop ideas, which could fuel the current recovery process, market sources said.

New York cotton futures stayed firm and were quoted further higher by 0.13 and 0.09 cents per lb at 46.02 and 46.72 cents for both the ruling March and the distant May contracts, respectively.

There was, however, no change in the local official spot rates for the third session in a row despite the fact the prices in physical trading showed sharp rise.

Mill ready off-take was on the higher side, where about 30,000 bales changed hands as under:

SINDH TYPE: 11,000 bales, upper Sindh done at Rs3,000 to 3,100, 1,400 bales, Shahdadpur at Rs2,850 to 3,000, 400 bales, each Punjmoro, Hyderabad, and Hala at 2,900.

PUNJAB VARIETY: 1,000 bales, each Jalalpur and Lodhran at 2,900, 1,400, 3,000, 1,000 and 600 bales, Bahawalpur at 3,000, 2,000 bales each, Sadiqabad, 3,000 bales, Khanewal and Rahimyar Khan at Rs3,000 to 3,050, 3,000 bales, Rajanpur at Rs2,900 to 3,050, and Rs1,500 bales, Khanpur at Rs3,050.