Picking operations halted by ongoing monsoon rains in the country, which cause increase in the rates on the cotton market on Wednesday, dealers said. The Karachi Cotton Association (KCA) official spot rate was higher by Rs 100 to Rs 6100, they said.

In the ready business fresh rains disrupt trading activity as just 3000 bales of cotton changed hands between Rs 6200-6300, they said. Phutti prices in Sindh were at Rs 2650 and in Punjab, the rate was up by Rs 50 to Rs 2850, they added. Market sources said that after the removal of Regulatory Duty (RD) on cotton yarn export, wait-and-see attitude was adopted by most of the traders to see the affect and implications on cotton trade.

In the meantime, it is most likely that the spinners may indulge in fresh deals in the coming days, they said. The textile mills and spinners were happy as the government did what they were asking for. As a result, the spinners and mills are likely to resume normal operations for the purpose of export. On the other hand it appeared that the ginners raised asking prices due to fall in phutti arrivals, they added.

Trading activity may shrink in the short-term due to rains and likely to resume after two or three days, they said. On Tuesday the NY cotton futures ended near a three-week top as nearby contracts were buoyed by tight deliverable supplies while back months declined as a result of weak outside markets, brokers said.

The December cotton contract gained 0.21 cent to end at 76.70 cents per lb, moving from 76 to 76.94 cents. It was the loftiest close for the second position contract since July 8, according to Thomson Reuters data. The spot October cotton contract added 0.23 cent to finish at 81.45 cents.

October enjoyed a 4.75-cent premium over key December, from the previous session's premium of 4.73 cents. Volume traded in the December contract stood at 11,979 lots at 2:33 pm EDT (1833 GMT).

The following deals were reported: 600 bales of cotton from Arifwala sold at Rs 6200, 400 bales from Burewala at Rs 6200-6300, 600 bales from Mian Channu at Rs 6200-6285, 600 bales from Chichawatni at Rs 6250-6300, 200 bales from Jhang at Rs 6250, 400 bales from Samandari at Rs 6250 and 200 bales from Pak Pattan at Rs 6300.