KARACHI, Feb 27: Cotton prices soared to 10-year peak level of Rs3,500 per maund for quality lint on the Karachi Cotton Exchange on Wednesday as leading spinners opted to grab the floating stock amid fears of an imminent fresh price flare-up based on short supply.

A deal for 800 bales from a Khanpur ginnery was reported at Rs3,500, which dealers said, is last decade’s peak level established partly by a short crop and partly to an unprecedented price flare-up on the world cotton markets, notably New York Cotton Exchange.

An idea of panic mill buying may well be had from the fact that a cartel of spinners purchased a big lot of 10,000 bales of fine lint from upper Sindh ginneries at Rs3,340 to Rs3,345 per maund.

But on the other hand, inferior lots were traded Rs3,100 to Rs3,250 per maund both from the central Sindh and Punjab cotton belts.

“After a steep rise in world prices, imports have become more expensive now and are well above our export parity levels,” said a spinner, adding “the only option is to opt for the local stuff despite the fact that ginners are also following the line of foreign markets.”

New York cotton futures maintained their upward drive on strong speculative buying and were quoted at new highs of 78.47 and 79.48 cents per lb for both the matured March and the ruling May settlements, respectively.

The next target of 80 cents per lb for the May contract may not be that far off, while the distant July delivery is being quoted above 81 cents per lb, signaling that the best level is yet to come, market sources said.

But quick deliveries and lower freight rates make the local stuff a bit competitive despite the fact that ginners may further raise their asking prices in the coming week, he said.

Those ginners who are holding long unsold positions are said to be a bit happy on the sudden change in price outlook and appeared to be in no mood to indulge in hasty selling on the perception that prices could rise further during the coming weeks, floor brokers said.

Despite active mill demand around the current levels, ginners are reluctant and prefer awaiting further developments on the supply and demand fronts, they added.

Official spot rates were revised upward in line with the ready section and were quoted higher by Rs25 at Rs3,200 per maund.

The following are some of the deals, which went through in the ready section late in the evening: 1,850 bales, Dadu at Rs3,250, 1,500 bales, Liaquatpur at Rs3,100 to Rs3,150, 400 bales, Kabula, at Rs3,400 and 400 bales, Bahawalnagar at Rs3,150.