Cotton market devoid of activity
KARACHI: The cotton market remained devoid of activity on Saturday as spinners were not interested in entering into new deals.
The falling prices of textile goods on the world market and slow exports have caused huge backlog of unsold cotton yarn with spinners, brokers added.
Many spinners facing huge liabilities have sold their cotton stocks to create liquidity to pay off power bills, wages, etc, brokers said, adding that the delay in relief package was also hurting the textile industry, they said.
Meanwhile, sowing for the new cotton season is going on at full swing and the issue of irrigation water shortage has also been resolved to a large extent. “Looking at these developments, one can say that the next crop would be better,” cotton analyst Naseem Usman said.
There were market reports that larger than normal quantity of yarn had been imported from India which could be verified from the ‘drawback on local taxes and levies’ scheme. This was another factor why spinners still held huge unsold stocks of yarn, he added.
The Karachi Cotton Association left its spot rates unchanged on Saturday. Major deals on the ready counter were: 3,400 bales from Rahimyar Khan at Rs6,925 per maund (around 37 kilograms), and 200 bales from Bahawalpur at Rs7,000.
The world’s leading cotton markets remained mixed. The New York market moved higher on encouraging export figures while Chinese and Indian cotton markets were easy.