KARACHI, Sept 30: Cotton prices on Thursday plunged to new seasonal lows as predictions of a higher crop allowed spinners and mills to remain selective buyers mostly at dips after fears for future supplies were allayed.

"Spinners enter and leave the market at will keeping the ginners and growers at their toes all the time followed by further decline in prices," brokers said. As a result, some of the deals in the central Sindh variety were done as low as Rs1,750 to Rs1,850, about Rs200 lower as compared to early week rates, they said.

In Sindh, phutti rates have also declined below the official support price of Rs925 per 40 kg to Rs730-775, and that of the Punjab variety to Rs800 to Rs900 per 40 kg depending on the quality, they said.

"The cotton market is now in a real crisis and the growers being at the receiving end," says a cotton consultant. "The panic with which a grower is dumping his stocks signals the panic among them and their endeavour to sell unsold stocks at the prevailing prices."

"Unlike the previous season when the market was in the tight grip of the growers, they are the victim of a possible production glut during the current season," some other crop analysts said.

They said cotton prices could improve a bit from the current bottom rates by the end of the current season, but global glut despite higher consumption might not allow any significant change in the future price outlook.

Meanwhile, a delegation of the Pakistan Cotton Ginners Association (PCGA) led by a minister on Thursday met the TCP chairman and had a detailed discussion on the developing crisis in cotton and ways to ensure a fair price to all in the trade, according to market sources.

The TCP chief is claimed to have indicated to buy 0.1m bales for the near-term and may buy more depending on the world cotton situation and the demand for the commodity, they said. "But talks of a buffer stock of about 0.3m bales remain inconclusive," they added.

The official spot rates were further lowered by Rs35 to Rs2,015, but in the ready section prices fell further. New York cotton futures on the other hand rose by 0.25 cents for the October delivery but fell by 0.98 cents for the December contract at 48.20 and 47.03 cents per lb, respectively.

Ready off take was active as till late in the evening about 10,000 bales, changed hands, the following being some of the notable deals: 2,000 bales, Mirpurkhas at Rs1.750 to Rs1,850; 1,000 bales, Tando Adam at Rs1,850 to Rs1,900; 1,000 bales, Sanghar also at this rate; and 1,000 bales, Shahdadpur at Rs1,925. About 5,000 bales from Punjab ginneries changed hands between Rs1,950 and Rs2,000 per maund.