KARACHI, Nov 12: Cotton prices on Wednesday maintained their downward drift for the third session in a row as ginners indulged in panic selling apparently in sympathy with the current turmoil on the world markets.

But some brokers said the two per cent hike in the discount rate from 13 per cent to 15 per cent, which will have negative impact on production and exports and will add to the cost of production, was one of the reasons behind the steep fall of Rs150 per maund in prices.

Lint prices are heading to hit the low of Rs2,500 per maund as they did last month before a strong rebound, if the world markets remained unsettled, spinners said adding: “Dwindling textile exports amid falling rates may cause a major fall in local demand for lint.”

“It appears to be a belated reaction to the steep decline in New York cotton futures for the last couple of days,” said cotton analysts adding: “Ginners, who have been holding on to their unsold positions despite weak international markets, were obliged to toe the world parity rates”.

What seems to have sent shock waves among the leading ginners, who were holding long unsold positions, was another limit-fall in the New York cotton futures, which drove the world cotton market lower followed by panic selling, they said.

The fall of the ruling December contract below the benchmark of 40 cents per lb seems to have paved the way for further price erosions as leading stock holders will try to balance their statistical positions after having sold long position, they said.

New York cotton futures were quoted lower by 2.10 and 2.62 cents per lb at 39.14 and 42.14 cents per lb for both the ruling December and the forward March contracts, respectively.

Official spot rates were again revised downward by Rs150 per maund at Rs3,000 but in the ready section some deals were done as low as Rs2,800.

The following are some of the deals reported in the ready section:

SINDH TYPE: 2,000 bales, Mirpurkhas, Sultanabad at Rs2,800 to 2,950, 2,000 bales, Shahdadpur at Rs2,900 to 3,025, 1,000 bales, upper Sindh at Rs3,100, 600 and 800 bales, Tando Adam and Khipro, and 400 bales, Khairpur at Rs2,950 to 3,000.

PUNJAB VARIETY: 1,600 bales, D.G. Khan at Rs3,100 to 3,125, 600 bales, each Bahawalpur, Shah Jamal, Burewala, 200 bales, each Burewala, Haroonabad, and Qaboola at Rs3,100, 400 bales, Arifwala at Rs3,000 to 3,075, 800 bales, Kabirwala at Rs3,100 to 3,125, 800 bales, Ahmedpur East at Rs3,075, 400 bales, Uch Sharif at Rs3,175, 400 bales, Alipur at Rs3,050, 200 bales, Vehari at Rs3,000 and 400 bales, Sadiqabad, Rs3,100.