KARACHI: Trade turnover and price of cotton continued to fall at the local market in line with the downward trend at the benchmark New York cotton market, a dealer said on Wednesday.
“Cotton trading remained dull at the local market in line with the downward trend at New York cotton market,” Taqi Abbas, a member of the Advisory Committee of the Karachi Cotton Association (KCA), said.
Meanwhile, traders exchanged 3,210 bales (155 kilograms each) at Rs6,400 to Rs6,800 per maund against 800 bales traded at Rs6,600 to Rs6,800 per maund a day ago, the KCE reported. At the current trade turnover, the broker considered market at a standstill. He said that the markets used to trade 40,000 to 50,000 bales on active days.
Meanwhile, the KCE kept its cotton spot (average) rate unchanged for the second consecutive day at Rs6,800 per maund (37.324 kilograms). During the last two days, the exchange has declined the commodity price by a total of Rs100 per maund.
Accordingly, Jalalpur witnessed the highest trade of 1,000 bales at Rs6,800 per maund; Khanewal and Mian Channu traded 800 bales each at Rs6,400 to Rs6,500 per maund; Faqir Wali traded 210 bales at Rs6,400 per maund; and Multan and Rahim Yar Khan traded 200 bales each at Rs6,450 to Rs6,800 per maund, the KCE reported.
The broker said that electricity crisis in Faisalabad industrial zones has crippled the industrial production. The zones own around 80 percent spinning mills of the country. And they (zones) are facing prolonged electricity outages for up to 18 hours a day.
Moreover, the industry is also facing liquidity crunch since the Federal Board of Revenue (FBR) had imposed two percent sales tax on cotton yarn. “The lack of finances is not allowing the spinning mills to buy more cotton stocks.”
He urged the government to withdraw sales tax or reduce it to a reasonable level.
In its latest fortnightly cotton production report, the Pakistan Cotton Ginners’ Association (PCGA) reported a decline of 1.78 million bales, or 12 percent, to 12.88 million bales’ production in the nine months ended March 31 against 14.67 million bales produced during the same period last year.