Cotton prices came under pressure on Monday where buyers were conspicuous by their absence and underlying sentiment also remained easy.
The dwindling demand for cotton yarn in domestic market is causing cash flow problem for entire textile industry and it was also adversely affecting exports, brokers said.
They said the market is lacking trading interest as spinners were generally reluctant to enter into big deals. The shortage of quality lint is yet another factor which is restricting trading activity, they added.
Trade circles said that India is giving 5 per cent rebate on cotton yarn and fabric exports to Pakistan but has imposed 26 per cent duty on imports from Pakistan. This is encouraging dumping of both the commodities from Indian exporters.
The much-expected high demand for cotton yarn from China also could not materialise and spinners are presently faced with high inventory problem, brokers maintained. Besides, very little cotton stocks are left in the country as the current season is near fag end.
The Karachi Cotton Association (KCA) reduced its spot rates by Rs50 to Rs6,900 per maund and trading activity on ready counter was extremely slow.
The following deals were reported to have transpired on ready counter: 200 bales, station Bahawalnagar, at Rs6,875; 400 bales, Bahawalnagar, at Rs6,900, 1,500 bales, Haroonabad, at Rs6,900 and 1,500 bales, Faqirwali, at Rs6,900.
Source:- dawn.com
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