KARACHI: Official spot rate drifted lower on the cotton market on Thursday amid rise in demand by the mills, dealers said. The official spot rate came down by Rs 25 to Rs 3,525. The Phutti prices in Sindh and Punjab were at Rs 1,700-1,800. In the ready business, 10,000 bales changed hands between Rs 3,400-3,600, they added.

Market sources said the physical activity increased in the business of low quality cotton as ginners were not lowering rates of fine quality in anticipation of increase in the rates in the near future. In the meantime, to run the daily business, the mills did buying of low type as they know they have to depend on the import to meet the export orders despite the higher rates, they said.

The New York cotton market is on bullish note due to news that China, the world’s top consumer of cotton, is preparing a plan to buy cotton for its reserves. Another positive factor is news that China’s 2009/10 cotton imports are forecast at 3.0 million tonnes, up 85 percent from the estimated 1.6 million tonnes in 2008/09.

The ginners have no big lot of fine cotton so they feel to keep the prices up to gain profit, they added. On Wednesday, the NY cotton futures finished lower on mild profit-taking as the market came off a 12-week top, and fibre contracts will look for leads from a weekly sales report tomorrow, brokers said.

The most-active July cotton contract declined by 0.51 cent to end at 50.79 cents per lb, moving from 50.27 to 51.89 cents. On Tuesday, the contract ended at 51.30 cents in the highest close for cotton on the second position charts since January 28. Volume traded in the July contract was at 7,546 lots at 2:39 pm EDT (1840 GMT). Spot May cotton fell 0.54 cent to finish at 49.29 cents, trading from 48.60 to 49.95 cents.

The following deals were reported: 400 bales of cotton from Ghotki sold at Rs 3,500; 2,000 bales from Salehpat at the same rate, 600 bales from Karachi (exporter to mill) at Rs 3,600 (credit) 1300 bales from Ali Pur at Rs 3,450; 2,600 bales from Jotai at Rs 3,550; 2,000 bales from Ali Pur at Rs 3,450 and 600 bales from same station at Rs 3,400, they said.