KARACHI, Sept 30: Pre-Eid holiday mood prevailed on the cotton market on Tuesday as spinners and mills remained conspicuous by their absence apparently having an overview of the crash of New York cotton futures and its impact on the local market.

There was, however, a relative quiet on the local market as both buyers and sellers kept to the sidelines awaiting fresh developments on the world cotton markets, dealers said.

“The rejection of the Bush’s $700 billion bail-out package by the US House of Representatives sent a wave of shock across all the continental markets as investors saw another massive plunge of both financial and the commodity markets,” analysts said.

New York cotton futures crashed by well over limit-fall of 3 cents per lb for both the ruling October and the forward December contracts at 55.06 and 57.38 cents per lb respectively on panic-selling by both traders and long positions holders speculative forces.

Analysts said local prices could ease further from the current levels when the trading resumed after Eid as spinners would go for more forward import deals at the falling world prices.

“The local prices, which are now a bit higher than the world prices, will have to readjust to international parity levels irrespective of the fact that the local crop is short of the target,” they added.

However, owing to Eid holidays, the local market was saved by an immediate negative impact on the local prices but post-eid trading will show how will it behave, they said.

Meanwhile, private sector exporters who have been fairly active during the last couple of weeks withdrew to the sideline after the crash of world prices amid importers’ reluctance to go for fresh consignments until the turmoil in the western markets ends.

Official spot rates were again held unchanged at Rs3,900 per maund but in the ready section no fresh deal was reported owing to delivery problems in Eid holidays.