Panic selling was again witnessed on the cotton market on Tuesday as prices are moving downward due to steady phutti arrivals, dealers said.

The Karachi Cotton Association (KCA) official spot rate resisted further decline, maintaining overnight level at Rs 5,750, they said.

Prices of seedcotton in Sindh were unchanged at Rs 2000-2500 and rates in Punjab also followed same pattern as no variations were at Rs 2300-2600, they said.

In ready dealings about 27,000 bales of cotton changed hands between Rs 4,400-6,100, they added According to the market sources, both buyers and sellers were present in the market to make new deals but at a point purchasers looked helpless as they were facing a lot of troubles because transporters were changing double rates due to shortage of vehicles following the government's decision to stop trains for carrying goods from one place to another.

The growers were not happy under the circumstances and trying to sell the stuff just to save from future losses, analysts said.

They also said that firmness in the NY cotton futures may bring some rescue for the rates.

On Tuesday the NY cotton futures settled higher on investor short-covering as the market climbed for the third straight session after sinking last week to a 14-month low, analysts said.

The key December cotton contract on ICE Futures US rose 1.74 cents to end at 99.68 cents per lb, dealing from 97.57 to $1.0063.

Last Thursday the contract fell by almost three percent to end at 96.86 cents in the lowest settlement for the spot contract since September 2010.

It was the first time in almost four weeks the December contract broke a trading band ranging from 98 cents to $1.04.

Total volume traded on Tuesday hit over 23,000 lots, about two-thirds over the 30-day norm, preliminary Thomson Reuters data showed.

The following deals were reported: 400 bales of cotton from Tando Adam sold at Rs 4400-4500, 200 bales from Sakrand at Rs 4600, 400 bales from Mir Pur Khas at Rs 4700, 200 bales of cotton from Moro at Rs 4950, 2000 bales from Khair Pur at Rs 5200-5700, 1000 bales from Upper Sindh at Rs 5650, 5400, 5600, 1000 bales from Haroonabad at Rs 5500-5800, 200 bales from Kichi Wala at Rs 5600, 200 bales from Chistian at Rs 5650, 1000 bales from Rahim Yar Khan at Rs 5700/5750, 200 bales from Hasil Pur at Rs 5700, 3000 bales from Burewala at Rs 5700-6000, 200 bales from Khan Pur at Rs 5700, 2000 bales from Khanewal at Rs 5800-5950, 1000 bales from Kabir Wala at Rs 5700-5900, 1000 bales from Dunia Pur at Rs 5700, 600 bales from Fort Abbas at Rs 5700-5750, 400 bales of cotton from Pak Pattan at Rs 5700, 600 bales from Dera Ghazi Khan at Rs 5700/5790, 200 bales from Lodhran at Rs 5700, 600 bales from Jalal Pur at Rs 5700-5800, 200 bales from Mongi Bangla at Rs 5725, 1200 bales from Chichawatni at Rs 5775/5800, 200 bales from Marott at Rs 5800, 1200 bales from Ali Pur at Rs 5800, 200 bales from Vehari at Rs 5800, 1000 bales from Layyah at Rs 5800, 2600 bales from Rajan Pur at Rs 5800-6000, 1400 bales from Arifwala at Rs 5900, 800 bales from Fazil Pur at Rs 6000 and 200 bales from Mian Wali at Rs 6100.