KARACHI, March 4: Panic buying was again witnessed on the cotton market on Tuesday as spinners and mills lifted another 30,000 bales for the third session in a row amid fears of an imminent price flare-up.

Apart from galloping New York cotton futures, which is heading to hit their near-term target of 90 cents per lb, a decline of over a million bales or 8.49 per cent in the arrivals figure of phutti also worried the end-product users, said leading cotton analyst Naseem Usman.

“How many more spinning units will shut down their business in the coming days as the lint has become too expensive to spin is not clear but the textile sector is certainly heading for a major crisis,” said a leading broker Muhammad Adil.

According to consolidated arrival figures up to March 1, released by the Pakistan Cotton Ginners Association (PCGA), the total of 11.201m bales is short by a million bales as compared to last season arrival by the same date.

Out of the total, mills and spinners have purchased 9.636m bales, and exporters 0.100 bales, leaving an unsold stock of about 1.5m bales with the ginners.

Spinners said what worried them most is persistent increase in the New York cotton futures, which on Tuesday showed limited gains of three cents for both the ruling May and forward July contracts at 85.18 and 86.52 cents per lb, respectively.

Indications are that speculative traders will not loosen their grip on the future contracts until they hit the target of 90 cents per lb, which in turn will make imports of lint too expensive and creating new problems for the textile industry.

Official spot rates were quoted higher by Rs25 per maund but in physical trading fine lots were sold at Rs3,500 per maund.

Mill ready off-take amounted to 30,000 bales, the following being some of the notable deals:

SINDH VARIETY: 400, 200, 2,100 and 800 bales, Hala, Mirpurkhas, Jhoke and Shahdadpur, respectively, at Rs3,400 and 1,300 bales, Khipro at Rs3,325.