KARACHI: Cotton market was listless on Saturday owing to restricted supply since phutti (seed cotton) picking remained suspended during two days of Ashura.

Short cotton supply coupled with rapidly falling world cotton prices particularly New York cotton which slipped below US 80 cents per lb to around 78 cents per lb also impacted domestic market trading.

Despite no fall in cotton prices during the week, the prices declined between Rs200 to Rs300 per maund in line with world trend.

The rising tensions between China and United States are adversely affecting cotton prices particularly New York cotton because China has halted buying from the US.

The Indian cotton market was also under pressure but Chinese and Brazilian markets on the other hand remained firm. The higher production expected in the US market and weaker dollar against other major currencies has resulted in declining cotton prices, observed Naseem Usman chairman Karachi Cotton Brokers’ Forum.

The concessions given to the textile sector along with other zero rated export sectors in the mini-budget by the government particularly to Punjab textile industry in addition to the proposed cuts in gas tariff are likely to increase exports.

However, falling trend in cotton yarn and other textile products in domestic market are feared to assert pressure on cotton prices keeping in view the expected increase in phutti supply.

There is a greater possibility that the big spinners would become active to cover up their position with quality lint which would be available in abundance from next week, brokers said.

Due to a shortage in crop, the spinners are expected to import four million bales of cotton in this season impacting the already declining foreign exchange reserves, they added.

The lint prices during the week hovered around Rs7,975 to Rs8,200 for Sindh variety and Rs8,100 to Rs8,200 for that of Punjab.

Similarly, phutti prices remained lower between Rs3,700 to Rs3,800 per 40kg from Sindh, Rs3,500 to Rs3,800 for Punjab variety. Balochistan phutti was quoted in the range of Rs3,900 to Rs4,000 per 40kg.

The Karachi Cotton Association spot rates remained pegged at Rs8,200 per maund and trading on ready counter was negligible.

Published in Dawn, September 23rd, 2018