KARACHI: No trading of cotton was witnessed at the domestic market on Monday after spinning mill-owners refused to pay higher price for the commodity, a dealer said.
Ginners were demanding much higher prices for the commodity after Pakistan Cotton Ginners’ Association reported a decline of 1.60 million bales to 12.76 million bales during the period from July 1, 2012 to February 28, 2013 against 14.37 million bales produced in the same period last fiscal year.
Spinning mill-owners, however, refused to pay such high prices. The situation resulted in no trading of cotton bales, he said.
However, the KCE kept its spot rate unchanged at Rs6,400 per maund for the fourth consecutive working day.Earlier, the higher quality cotton was being sold at Rs6,400 to Rs6,600 per maund (37.324 kilograms) on cash and up to Rs72,00 per maund on credit, he said.
He said that the medium quality cotton was available at around Rs6,000 per maund, while low grade cotton was being traded in the range of Rs4,800 to Rs5,800 per maund, he said.Other causes of no trade during the day included imposition of two percent sales tax on the commodity’s trading and five percent withholding tax on imports, he said.
Players involved in textile manufacturing – from trading to finished goods – are now liable to pay two percent sales tax each. “Ginners, however, remained exempted from the tax.”On Saturday, traders exchanged 2,500 bales at Rs6,300 to Rs6,600 per maund, the KCE reported.