KARACHI, Dec 18: The trading activity on the cotton market on Saturday virtually remained at a standstill as sellers and buyers kept to the sidelines after the New York cotton futures soared to a new record level of 150.12 cent per lb as speculative squeeze was further intensified.

Both spinners and mills did not opt for fresh buying at the higher levels and preferred having an overview of the developing situation on the global markets and its impact on the local price outlook, analysts said.

“The textile industry is progressively heading for a major crisis, having a major negative fallout on the economy, notably foreign exchange earnings,” they said “owing to a short local crop, the industry needs about three million bales more to make up the shortage and keep the wheels running.”

“It is not possible to export textile after having imported lint from various sources at 150.00 cents per lb,” most spinners and mills think “the outflow of exports may not be halted for the time being but it would certainly suffer a sizeable contraction.”

The textile industry may have to revise its export targets in the changing world cotton scene if current speculative squeeze continues on the world markets, they fear.

However, ginners did not quote prices in line with the New York cotton futures as spinners and mills were in a fix how to behave in the developing situation on the cotton front.

The physical activity is expected to be resumed by the next week when spinners would have reviewed the current price situation, including fall if any having determined the export parity rate based on latest import rates of lint.

In the absence of buyers, there was no change in the official spot rates, which were held unchanged at Rs9,100 per maund.

Unconfirmed reports said some lots did change hands but no deal was officially transmitted to the Karachi Cotton Association (KCA), by Karachi Brokers’ Forum.