KARACHI, Dec 16: Trading activity on the cotton market on Friday showed a sizable expansion as some leading spinners’ group made active covering purchases against their forward sales of cotton yarn.

But bulk of the buying interest remained confined to the Punjab variety, notably fine lots, which were sold at around Rs2,425 per maund. Two big lots of 3,000 and 4,000 bales changed hands at the day’s highest rate of Rs2,425.

After Thursday’s pause apparently to take stock of their inventories, spinners and mills were back in the market followed by conflicting reports about the size of arrivals of phutti into ginneries for the fortnight ending Dec 15, brokers said.

They said the market is expected to further heat up during the post-arrival figures session as perception of a short crop will continue to haunt them, with smaller textile groups remaining at the receiving end after January next year.

Those spinners who operate on short-term basis because of liquidity problem may suffer erosion in their profit margin as the lint may be more expensive during the next couple of months, they added.

Higher New York cotton futures well above the benchmark price of 50 cents a lb makes import of lint more expensive and above their export parity levels, leading to a modest decline in export of textiles, some others said.

Owing to higher local prices, private sector exporters are not that enthusiastic about the exports as was reflected by their registration of fresh export contracts up to Dec 7, totalling 4,608 bales.

Physical shipments against the firm contracts by them are modest at 3,913 bales, up to Sept 30, 2005 which are much lower than the previous year’s comparable figure.

Official spot rates remained pegged at the last levels, but on the other hand New York cotton futures suffered fresh modest decline of 0.23 and 0.32 cents at 53.01 and 53.76 cents per lb for both the ruling March and the distant May settlements, respectively.

Ready business was on the higher side totalling 20,000 bales, the following being some of the notable deals: 4,000 bales, Lodhran and 2,000 bales, Jalalpur at Rs2,425; 2,000 bales, DG Khan at Rs2,400 to Rs2,415; 3,000 bales, Rahimyar Khan and 1,000 bales, Sadiqabab at Rs2,400 to Rs2,425; 800 bales, Haroonabad and 600 bales, Multan at Rs2,400; 400 bales, 800 bales and 1,000 bales, Uch Sharif, Alipur and Ahmedpur East, respectively, at Rs2,415.