KARACHI: Highly volatile conditions prevailed on the cotton market on Saturday as activity picked up on strong lint demand from spinners.

The imbalance between demand and supply of cotton owing to slow arrival of phutti (seed cotton) continues to influence prices which stood on the higher side.

Due to high rates being quoted on ready trading, the Karachi Cotton Association (KCA) also revised its spot rates upwards by Rs200 to Rs8,600 per maund.

Earlier in the day prices moved higher but towards closing stages some profit-selling eroded earlier gains. However, prices generally remained above average due to strong demand and shortage of cotton.

The world leading cotton markets after moving higher in the week also came under profit-selling. New York cotton closed all around easy for future contracts.

However, the government decision to impose 5 per cent sales tax on imported cotton has disappointed the textile industry which is already faced with cotton shortage.

The government has also removed raw cotton and ginned cotton from zero rating and this will add up to the cost of the textile industry which feels that advantage of devaluation of the rupee will be totally eroded by such measures.

Trading on ready counter was fairly brisk as spinners rushed to replenish their stocks in front of short cotton supply.

The following deals were reported to have changed hands on ready counter: 1,400 bales, Shahdadpur, at Rs8,750 to Rs8,800; 2,000 bales, Tando Adam, at Rs8,800; 1,000 bales, Sanghar, at Rs8,800; 200 bales, Hyderabad, at Rs8,800; 400 bales, Kotri, at Rs8,800; and 200 bales, Chichawatni, at Rs8,800.

Published in Dawn, July 15th, 2018