KARACHI: The cotton market remained extremely dull and dreary on Saturday as textile spinning mills remained absent and there seemed to be little hope of any turnaround in near future.
The international and local factors continued to hamper smooth trading.
The domestic market had been performing much below its capacity owing to slow demand for cotton by the spinning industry which is presently working under the burden of huge unsold yarn stocks.
Consequently, amid thin trading, cotton prices remained under pressure and closed lower with official spot rates cut down by Rs100 to Rs8,700 per maund during the week.
The cotton rates for Sindh and Punjab varieties hovered between Rs7,000 to Rs8,800 per maund where as phutti (seed-cotton) was quoted between Rs3,000 to Rs3,900 per 40kg.
Chairman Karachi Cotton Brokers’ Forum Naseem Usman said that currently there is a slump in demand as well as prices of textile goods in both domestic and international markets. Therefore, spinners are avoiding to further pile up their stocks with cotton.
He further said that during his recent visit to Faisalabad he witnessed that a large number of power looms have shut-down and owners are selling their machinery in scrap.
Those still operating their power-looms are also under crisis because of slow offtake of fabric. This has also rendered a large number of work force jobless and traders are worried about their livelihood as they are sitting idle, he added.
Similarly, ginners are also in a fix as they are holding huge stocks of unsold cotton and they have stopped from lifting more phutti from growers.
In short, the entire cotton economy is currently under a crisis with all the segments facing uncertainty.
The Karachi Cotton Association spot rates were steady at overnight night level at Rs8,700 per maund.
The trading on the ready counter remained restricted to a few deals and as per official reports, the following deals were finalised: 1,000 bales from Ghotki were done at Rs9,000; 400 bales, Fazilpur, at Rs9,000 and 620 bales from Kot Sabzal were done at Rs8,700-8,800.
Published in Dawn, January 6th, 2019