KARACHI, June 9: Budget uncertainties dominated the trading on the cotton market on Saturday as both buyers and sellers awaited tax relief and incentives for the textile sector.
Most analysts believe that the new budget may be terribly textile sector friendly as the government is inclined to boost it after giving more incentives to achieve the newly set up export target of $14 billion for it, said a leading cotton broker.
The widely speculated incentive package is due to be announced along with the federal budget, which in turn could give the needed boost to a terribly dull market sans buyers, floor brokers said.
While ginners being pretty sure that the new fiscal measures may not affect them in financial terms at least during the current season, spinners and mills are tossing between ifs and buts apparently unsure whether or not their demand will be met in toto, they said.
However, a larger section of spinners is a bit optimistic apparently on some pre-budget “leaks” from their Islamabad sources and hoped that the new budget could bail them out from the current impasse.
In the backdrop of a modest unsold stock of 0.150 bales with ginners, analysts said, “There could be a fight between leading textile groups to grab the floating stock and the consequent price flare-up, market sources said.
Some of the ginners are literally toying with this idea and may not be that wrong in their future market outlook based on supply and demand factors, they said.
There was no change in the official spot rates, which stood firm at Rs2,600 per maund.
But on the other hand New York cotton futures fell by 0.34 and 0.20 cents per lb at 51.42 and 55.00 cent for both the ruling July and the forward October settlements, respectively.
On the ready counter, physical business remained at low ebb as spinners were not inclined to make fresh commitments before the budget announcement.
