KARACHI, Aug 17: Cotton market on Saturday eased further but the falling prices failed to attract many spinners in their fold followed by reports of piling of unsold yarn inventories in the spinneries.

Stray lots did, however, change hands as some of the spinners holding short positions owing to liquidity problems lifted a modest number of bales at the lower levels.

“During the last three sessions, lint prices have dropped by Rs300 per maund from the seasonal peak level of Rs2,300, sending bearish signals among the ginners”, says a leading broker.

Most of the deals were reported at Rs2,000 on the lower side and Rs2,070 on the higher side as spinners were not inclined to bid above them because of parity reasons, he said.

But there was no immediate panic among the ginners as most of them held on to their positions on the perception that the shakeout is temporary and prices could rebound any time based on the supply and demand factors.

However, spinners think otherwise. A substantial decline in foreign demand and lower prices are claimed to have strained their financial position beyond their sustaining capacity, spinners say.

“Unsold stocks of cotton yarn are piling in our godowns in the absence of strong local demand”, they claim adding “the important factor behind the slow mill lifting is said to be the falling margins”.

Most spinners say the prevailing lint prices are on the higher side as compared to local as well as foreign selling prices of cotton yarn and they may not be in a position to resume normal covering operations until the market conditions improve.

Because of persistent decline in lint prices, phutti prices also showed a decline from the best level of Rs1,025 to Rs925 to Rs950 per 40 kg depending on the quality.

But growers in the lower Sindh cotton belt are holding on to their stocks rather than selling them in panic or at the lower prices below the prevailing ones.

Market sources said the current standoff may continue also for the next couple of sessions as spinners will await until lint prices fell below the Rs2,000 level.

There was, however, no change in the official spot rates but the New York cotton futures resisted fresh decline after having received massive battering a day earlier and turned mixed, up 0.4 cents for October contract and further lower by 0.14 cents for the distant December at 44.26 and 45.64 cents per lb respectively.

Ready offtake was modest as till late in the evening about 2,000 new crop bales changed hands as under: 200 bales, Sultanabad at Rs2,025, 200 bales, at Rs2,000, 200 bales, Mirpurkhas at Rs2,025, 100 bales, Tando Adam at Rs2,070, 200 bales, at Rs2,025, 200 bales, Sanghar at Rs2,000 and 500 bales, Burewala at Rs2,095.