KARACHI, June 11: Trading on the cotton market on Wednesday was a bit cautious ahead of the budget as spinners and mills adhered to the sidelines awaiting details of fiscal measures and taxation and relief proposals before making fresh commitments, analysts said.

The notable feature of pre-budget session was that a deal was finalised at an all-time high rate of Rs4,010 for the first time in the cotton history of Pakistan, signaling that lint may not be that cheaper in the new season also.

They said spinners are awaiting a relief package, which would significantly enhance their daily buying capacity of lint to meet their export commitments.

Indications are that the textile sector would be the chief beneficiary of the budgetary relief as the government intends to boost textile exports to achieve the export target of $18.00 billion, they said.

Physical activity, therefore, was relatively slow as both ginners and spinners awaited the details of fiscal measures in the budget before resuming fresh buying, floor brokers said.

They said normal activity is expected to be resumed during the next couple of sessions after stakeholders in the textile sector fully study the fiscal steps.

However, some of the private sector exporters having surplus stocks of lint against the forward sales are selling to the spinner as the local rates ensure more profits than physical shipments to foreign countries.

A leading exporter sold 1,000 bales, at Rs4,000 per maund Karachi delivery to a local spinner. But on the other hand, a forward deal of 200 bales of new crop for August delivery by a Sultanabad ginner was signed at Rs3,650 per maund.

There was, however, no change in the official spot rates which were firmly held at Rs3,800 but on the other hand New York cotton futures showed mixed trend.

While the ruling July contract rose by 0.25 cent per lb at 66.25 cents, the new crop October settlement was quoted lower by 0.11 cent at 70.59 cents per lb.

The following are Wednesday’s new crop Karachi Cotton Association (KCA) official spot rates for local dealings in Pak rupees for base grade 3 staple length 1-1/32” micronair value between 3.8 to 4.9 NCL.

Rate for Ex-Gin Price Up-country Spot rate

Expenses Ex-Karachi

37.324 kgs 3,800 50 3,850

Equivalent

40 kgs 4,072 50 4,122