KARACHI, Nov 22: Amid dwindling demand of clothing and textiles in the developed countries, raw cotton prices in the domestic market remained under pressure owing to slow off-take from the spinning industry.

There is a growing fear in the market circles that the slowdown in western economies would directly have its bearing on Pakistan’s economy where textiles have a major role to play.

Despite the fact the Karachi Cotton Association (KCA) spot rates remained unchanged at Rs2,950 per maund, but on ready-counter actual deals were finalised at lower prices in the range of Rs150 to Rs200. The Sindh cotton variety was quoted at Rs2,650 to Rs2,950 per maund and Punjab at Rs2,850 to Rs2,950 per maund on Saturday, floor brokers said.

Market circles said that the entire cotton economy is gradually slowing down. Whereas phutti stocks with the ginners are piling up, the spinners are forced to sell their yarn at much lower prices. They said this indicates that there is lesser off-take of fabrics by the value-added apparel and home textile sectors. The slow off-take of yarn eroded prices by Rs30 to 40 per bundle, market sources said.

If the western economies run into recession, Pakistan would have the impact because most of the textile products are exported to these countries.

The US and EU are major buyers of Pakistani textile products. India and China are also faced with similar crisis because they also mostly export their textile goods to western countries.

According to reports, around 0.3 million spindles have gone idle in China and about 0.5 million people lost their jobs in India. Therefore, the looming crisis would have its toll over Pakistan’s economy and textile sector, in particular, market and cotton analysts said.

According to reports, the government has called a meeting of all stakeholders on Tuesday in Islamabad to discuss the issue of rates at which the Trading Corporation of Pakistan (TCP) would be lifting cotton from ginners. The government has fixed Rs1,465 per 40 kgs as support price for procurement of phutti, which is Rs440 higher over the previous year.

The TCP has called quotations from the labour contractors for handling of cotton and the last date for submitting bids has been fixed for Dec 15. However, market sources said that by that time, 90 per cent of cotton would have been purchased from growers by the ginning industry. Therefore, it seems that the entire exercise is being taken to psychologically satisfy growers and not actually procure phutti from them, they added.