KARACHI, Oct 6: Cotton market on Wednesday crashed on panic-selling triggered by reports of higher arrivals of phutti into the ginneries and predictions of further decline in prices owing to a bumper crop.

An idea of the prevailing panic among the growers and the ginners may well be had from the fact that some of the deals in Sindh variety were finalized as low as Rs1,700 per maund, while that of Punjab around Rs1,950 on the higher side.

Cotton analysts said the market crash despite strong presence of the Trading Corporation of Pakistan (TCP) as a second buyer after spinners reflect that it failed to come to aid of ginners or growers as originally envisaged in its role to ensure a fair price for the grower.

"The market operations of the TCP appear to be too limited to support a falling market as growers are in panic to get out of the market without having second thought about the objective situation", they added.

The prevailing panic among the ginners and growers is identical to hasty selling witnessed a couple of years back after prices had fallen to Rs1,350 per maund, dealers said.

The current decline in prices has put spinners and mills on the winning side but their covering operations are confined to modest quantities as leading among them foresee further fall in the prices.

"The crop is certainly on the higher side of original estimates but in no way it should create panic-like conditions", says a leading broker commenting on the steep decline in prices "growers should know even a crop of 12m bales plus will be much lower than the annual consumption of the spinning sector."

What is needed for them is to show the strength of their holding capacity to restore sanity to the prevailing turmoil in the cotton trade, he said. It was in this background that official spot rates were lowered by Rs50 per maund, although in the ready section most of the deals were done well below them.

New York cotton futures also suffered modest decline of 0.38 and 0.10 cents per lb at 48.87 and 47.23 cents for both the ruling October and the distant December settlements, respectively.

Ready business was active as spinners lifted most of the lots offered mainly by the Punjab ginners, while their Sindh counterparts were reluctant sellers at the falling prices.

About 5,000 bales from Sindh ginneries changed hands between Rs1,700 to Rs1,850 depending on the quality of lint. Tando Adam, Sakrand, Shahdadpur, Sanghar, Bucheri ginners sold at the lower rates, while fine lots from Khairpur were sold around Rs1,850.

Punjab ginners sold about 20,000 bales, the following being some of the notable deals reported late on Tuesday evening: 1,000 bales, Jehania at Rs1,900 to Rs1,950, 400 bales, Sadiqabad at Rs1,900 to Rs1,925, 600 bales, Multan also at this rate, 200 bales, each Rahimyar Khan and Bahawalnagar at Rs1,900, 200 bales, Lodhran at Rs1,940 and 200 bales, Fort Abbas at Rs1,925.