KARACHI, Jan 4: Cotton prices on Friday soared to new seasonal peak level of 3,300 per maund as spinners and mills lifted another 40,000 bales amid panic created by the latest arrival figure of phutti into the ginneries.

There was virtually a speculative squeeze on fine lots from the upper Sindh and the southern Punjab ginneries as leading textile groups tried to the grab the floating stocks around the current levels, a leading cotton analyst Naseem Usman said.

He said the chief worry of the textile sector is how to bridge the massive supply gap of about five million bales, which will need about Rs70 billion at the current rate to finance the import bill.

“The textile now is in a real crisis,” said a leading spinner adding “the massive supply gap is hard to bridge because of expensive lint and fears that many textile and spinning mills may close down as it is not commercially viable to buy lint at the rising prices.”

According to official arrival figures released by the Pakistan Cotton Ginners Association (PCGA), the net decline in them is about two million bales at 9.114 million bales as compared to over 10 million bales during the comparable period last season.

Spinners and mills have still to go a long way to cover their annual consumption needs as their tally, so far, is around seven million bales, leading among them have, so far, imported about 1.3 million bales from various sources.

Market sources said ginners are also worried over the large unsold stock of 1.9 million bales, to which about Rs25 billion are tied.

It was perhaps in this background that the official spot rates were again revised upward by Rs50 at Rs3,125, but in the ready section most of the deals were done well above them.

New York cotton futures on the other hand suffered a modest fall of 0.17 and 0.19 cents per lb at 68.71 and 70.40 for both the ruling March and the distant May contracts, respectively.

The following are some of the notable deals in the ready section late in the evening:

SINDH VARIETY: 1,600 bales, Moro, 1,000 bales, Nawabshah, at Rs3,150, 1,400 bales, Shahdadpur at 3,150 to 3,200, and 1,200 bales, upper Sindh at 3,250.