KARACHI: Cotton prices moved down for the third straight day on Wednesday as leading buyers remained on the sidelines due to paucity of funds.

According to market reports, huge sales tax refunds are stuck with the government. The liquidity crunch is crippling the working and manufacturing operations of the entire textile industry, brokers said.

Talking to Dawn, a textile industry leader suggested that a scheme like bonus voucher should be launched as was done in the early 1970s. Since the trading of bonus voucher would be done on stock exchange, it will allow exporters to encash these and get the required funds needed to meet their future export commitments, he explained.

With receding buying interest for cotton, ginners have also slowed down their procurement of phutti (seed cotton) fearing huge losses if lint prices continue to fall.

Meanwhile, Cotton Commissioner Dr Khalid Abdullah has recommended to the government to withdraw 5 per cent sales tax on cotton seedcake on the ground for it being animal feed.

The world leading cotton markets remained easy with New York cotton managing to recover recent losses.

The following deals were reported to have changed hands on ready counter: 1,600 bales, station Fort Abbas, at Rs8,975-9,000; 1,000 bales, Haroonabad, at Rs9,000; 1,000 bales, Yazman Mandi, at Rs9,000-9,050; 1,000 bales, Sadiqabad, at R9,250-9,300; and 1,400 bales, Rahim Yar Khan, at Rs9,300-9,350.

Published in Dawn, November 14th, 2019