KARACHI, Aug 15: Cotton prices on Wednesday crashed as ginners sold their long positions in a bit haste followed by reports of steady arrivals of phutti into the ginneries and official nod for imports from India.

“Lint prices have declined by Rs400 to Rs450 per maund from the recent peak level of Rs3,400-Rs3,450 per maund on hasty selling by ginners followed by spinners’ threat to the government of shutting down their mills if lint import from India is not allowed,” said a cotton consultant Naseem Usman.

He said that there had never been witnessed such a market collapse. “The virtual panic among the growers and the ginners amid fears of fresh fall in prices, he added. Lint prices have soared to Rs3,400 per maund last week and phutti to Rs1,600-Rs1,700 per 40-kg having negative impact on the textile export front.

“Spinners seem to be now are back in the market after having purchased lint at the 10-year high prices,” a broker said, adding “where the end will come nobody could precisely predict”.

Market sources said prices could move further lower in the coming sessions on reports that the government may allow imports of lint from India as demanded by Aptma to cover the local crop shortfall.

“The local crop is short but not to that extent as being projected by some quarters and imports have to be made to make up the shortfall but on a modest scale,” they said, adding “there is no genuine cause for panic selling”.

Official spot rates were lowered by Rs50 per maund at Rs3,100 per maund.

Ready offtake was light as spinners kept to the sidelines anticipating further fall in prices. However 600 bales from Mirpurkhas and 1,000 bales from Sultanabad were traded lower at Rs3,000 and Rs2,900 per maund.