Low supply coupled with fears of lower quality in the new arriving bales, have pumped both the official and ready prices of cotton in the local market to a three-year high at the start of the season, cotton traders said Friday.

Cotton spot rates at the Karachi Cotton Exchange (KCE) have risen 26 percent from Rs 2,263 per maund at the start of the last season to Rs 2,867 at the start of the current season.

“The prices are rising on fears actually,” said Kamran Ahmad, a cotton broker at the KCE. “The main fears are the low micronaire level and the current low supply conditions, which can prolong.”

Micronaire value is a measurement that shows the strength of cotton fibre. A micronaire value between 4.5 and 5.2 is considered to be good for fine spinning.

Mr Ahmad added that this has made the mills eager to pick every little quantity of quality cotton available in the market.

Adil Naseem, another broker at the KCE, said the price level has been increasing over the last three, and now it has reached over Rs 2,850 per maund (37.32 kg), while in ready it has reached Rs 2,550, even at the start of the season. Usually the prices in ready market remain between Rs 1,900 per maund and Rs 2,200 per maund this early in the season, while the spot rates remains between Rs 2,000 and Rs 2,400 for the same quantity.

The prices are expected to rise further since the forecast is their for further rains, said Amin Nagarya, a mill owner. He said another big concern amongst the cotton traders and mills is the low micronaire level, which has still not reached the level required for fine spinning.

He added that the current market conditions indicate the mills may have to import cotton to meet their requirements.

The mic-level has reached only to 3.8 to 3.9 till now. It was expected to be around 5.2 at the start of arrival of new bales, and decline to a level of between 4.9 and 4.5 later. But the situation is inverse, as it started from 3.5 and has now reached 3.9