KARACHI: The cotton market remained devoid of activity on Wednesday as buyers and sellers stayed away from the trading ring.

In the absence of any clear direction from the government on the economic front and the erratic behaviour of currency market, trading dwindled in all commodity markets.

Slow off-take of cotton yarn in domestic and world markets is also taking its toll on the cotton trade. Most textile spinners are currently burdened with huge stocks of cotton yarn, brokers said.

“The entire cotton economy of the country is facing a financial crisis. Ginners holding huge stocks of unsold cotton are faced with liquidity crunch while textile spinners are bogged down with piled up cotton yarn stocks,” said cotton analyst Adil Naseem.

A leading cotton exporter Mian Mahmood Ahmed told Dawn that the export market was also not active because of the on-going US-China trade war. As a result all world leading cotton markets are performing below average and prices are also depressed, he said.

The cotton crop for the last four consecutive seasons had been recording a shortfall resulting in huge imports of the commodity for which the country has to foot huge bill of $1 billion to $1.5bn in foreign exchange, Mr Ahmed added.

If the country wants to enhance cotton production to 15 million bales, a road map must be worked out and followed to achieve the goal, he stressed.

The Karachi Cotton Association (KCA) spot rates stood static at Monday level at Rs8,700 per maund.

In the absence of buying interest trading on ready counter remained listless and no transaction was reported to have changed hands till late evening.

Published in Dawn, December 27th, 2018