KARACHI, June 6: The pre-budget session on the cotton market on Monday was dull as spinners and mills were not inclined to make fresh commitments before having an overview of the fiscal measures.
According to pre-budget rumours, the new federal budget is described as “textile budget”, as the textile sector may well be the major recipient of the fiscal incentives, dealers said.
As the new budget is expected to lay emphasis on more textile exports during the next year, it will be directly linked to cotton trade including future price outlook, they added.
Both the buyers and sellers, therefore, maintained a status quo, although ginners are now virtually out of the game as they have cleared their backlog of unsold stocks barring a couple of odd lots.
“Now the chief beneficiary of the tax relief could be the TCP or the textile sector as sellers and buyers of lint”, brokers said. “It is a no-win situation for the both,” they added.
However, the TCP may not be in a position to lower its selling prices for various grades despite lower world prices and will rely on the foreign buyers and wait for the better price situation.
Brokers said the next couple of TCP auctions may be very crucial in the backdrop of falling world prices and whether or not it will oblige local buyers in its next Saturday’s auction will set the future price trend.
Meanwhile, there was a relative quiet on the cotton export front as the last week’s fall below 50 cents per lb in the New York cotton futures for the ruling July settlements, is keeping off foreign buyers. There was no change in the previous foreign sales or shipment figures, according to official sources.
Official spot rates were, therefore, firmly held at the last levels.
Ready business was light as only an inferior type odd lot of 166 bales from a Mirpurkhas ginnery changed hands at Rs2,010 per maund.
