KARACHI, Dec 8: Cotton prices on Saturday eased further by another Rs50 per maund as ginners continued to liquidate their long positions in view of Eid holidays and closure of foreign markets owing to Christmas during the last week of the month.

In physical trading, some of the deals were done as lower as Rs2,900 per maund depending on quality of lint. Naseem Usman, cotton analyst, predicts prices could fall further in the next week amid falling mill demand.

Spinners were facing many problems but liquidity crunch was on the top. “Massive amounts of cash have tied to letters of credit (LCs) opened for the import of lint from India followed by bank demands to readjust overdraft limits before Dec 31, and the delivery problems plus higher freight rates owing to Eid holidays,” they said.

However, there was no official word on the forward import deals made by the spinners to make up the local crop shortfall, but some spinners claimed that the figure could well over a million bales.

Ginners were also worried over the developing conditions on the cotton front and weaker links among them were out to clear the backlog of their unsold stocks, market sources said.

But, spinners have a fair idea about the impact of persistent fall in phutti prices in the coming weeks and are trying to keep slate clean after having made forward sales of lint based on the current rates of phutti, they said.

The near-term cotton trade outlook appears to be a bit bearish despite a short crop, they said.

Meanwhile, reports coming from the cotton belts indicate that the third picking of phutti in the major growing areas is expected to be completed by the next week and the post-Eid week may witness the end of the picking operations.

Official spot rates were further lowered by Rs50 for the second session in a row at Rs2,950 per maund.

Ready business was on the higher side as till late in the evening about 15,000 bales changed hands, the following being some of the notable deals.

SINDH TYPE: 1,000 bales, Shahdadpur at Rs2,975 to Rs3,000, 400 bales, Dadu at Rs3,000 and 1,000 bales, upper Sindh at Rs3,100.

PUNJAB VARIETY: 500 bales, Hasilpur at Rs2,975 to Rs3,000, 1,000 bales, Arifwala Rs3,050, 2,000 bales, Rahimyar Khan, 1,000 bales, Khanewal, 1,000 bales, Rajanpur at Rs3,050 and 1,600 bales, Sadiqabad at Rs3,000 to Rs3,050.