Lack of buying interest pushed cotton prices further down on Tuesday as leading spinners and exporters kept to the sidelines.As the off-take of cotton yarn continues to be slow and spinners are faced with huge unsold stocks, the entire cotton trade is presently faced with liquidity crunch, brokers said.
The latest phutti (seed cotton) arrival figures indicate that substantial quantity of phutti is still held by growers and total production for current season may touch 13.5 million bales.
According to brokers, spinners are complaining that they are faced with cheap yarn being dumped by Indian exporters in the domestic market. Spinners said they could not compete with Indian yarn which gets 5 per cent rebate at export stage whereas Pakistani yarn exporters have to pay up to 26pc tax and duties.
However, it is interesting that phutti prices recovered by Rs100 per 40kg for Sindh and Punjab varieties which are now being quoted at Rs3,100 and Rs3,200, respectively. Meanwhile, around 1m bales are reported to be lying unsold with ginners.
On the world markets New York cotton opened on firm note where all the futures finished with modest gains.
The Karachi Cotton Association (KCA) cut its spot rates by Rs50 to Rs6,800 per maund and trading on ready counter was extremely slow. Only one deal of 400 bales was reported to have changed hands on ready counter at Rs6,
Source:- dawn.com
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