KARACHI, July 2: Cotton prices on Friday maintained their downward drift in the absence of strong buying from spinners and mills owing perhaps to turmoil on the world markets.

Although official spot rates were further lowered by Rs25 per maund, the spinners were not inclined make fresh commitments hoping further decline in prices, brokers said.

The standoff on the cotton front may continue until the new crop arrives in a big way as the ginners are not in a position to further lower their asking prices as most of them had purchased phutti at much higher rates, they said, adding they could only dispose of their stock at a loss if the current stalemate continues.

"The persistent decline in New York cotton futures has reinforced spinners' perceptions that the local rates are still on the higher sides," says a spinner. "We have to operate on the highly competitive foreign markets after judiciously adhering to export rates."

The persistent limit-fall in New York cotton futures has a negative bearings on the yarn and cloth prices the world over, and "we will not be in a position to sell our by-products after buying lint at the current levels," he adds.

New York cotton futures were traded further lower by 1.60 and 1.13 cents per lb for both the matured July and the new crop October settlements at 46.65 and 50.07 cents per lb, respectively.

But the local lint prices are being quoted at Rs2,900 despite the fact that 15 per cent sale tax on it has been waived in the budget. The spinners claim they are still higher as compared to the foreign lint.

"We can wait for another couple of weeks as we have reinforced our supply positions through massive imports though at much higher rates during the last couple of months," the spinners said.

The local stuff will be lifted after the prevailing turmoil on the world cotton markets ends and prices stabilize on certain commercially viable levels, they said. Meanwhile, according to market sources, some of the mills holding surplus stock of lint after meeting their demand were selling it to some needy mills at around Rs2,800 per maund.

A big deal of 2,000 bales went to the credit of inter-mill dealings as some of the Karachi-based spinners obliged each others, they said. Ready offtake was light as, barring 100 bales of new crop from a Burewala ginnery sold at Rs2,825 per maund, not other deal was reported in the current crop.