KARACHI: The cotton market lacked trading activity on Monday as buyers generally remained to the sidelines. The undertone remained easy and outlook uncertain.

Floor brokers said that the ongoing financial crisis in the textile industry and reports of further closure of spindles have dampened demand for cotton.

The liquidity crunch faced by the entire textile supply chain, brokers said, is the main cause for sluggish demand.

The huge outstanding payment towards duty drawback and other levies is crippling the textile industry and its exports, they added.

Therefore, fear of short crop and low quality of lint have become secondary issues as the demand for the cotton has dropped significantly owing to high cost of doing business, they added.

Though cotton price remained steady at weekend level, trading activity was extremely slow which signified that spinners are reluctant to build upon their stocks.

The Karachi Cotton Association (KCA) spot rates were unchanged.

Major deals on the ready counter were: 2000 bales from Khairpur done at Rs5360 to Rs5400, 2000 bales Sukkur at Rs5400 to Rs5450, 400 bales Haroonabad at Rs5350 to Rs5400, 600 bales Mianwali at Rs5550, 600 bales Sadiqabad at Rs5600, 1000 bales Rahimyar Khan at Rs5600, and 1200 bales Khanpur at Rs5600.

Published in Dawn, December 1st, 2015