KARACHI: The cotton market was sluggish on Saturday as global slowdown continued to affect domestic trade and spinners reduced their operations.

Floor brokers said China, the world’s leader in cotton and textile trade, has re­­duced imports which has directly hitting many ex­­port­ing countries like inclu­ding Pakistan. According to reports China is holding huge cotton inventory and is largely depending on these stocks.

Despite the fact that Pakistan is facing a year-on-year cotton crop shortfall of 34 per cent, or five million bales, demand from spinners remains subdued. Currently, around one million unsold stocks are held by ginners and hardly 20pc of these stocks are of quality lint, observed Naseem Usman, a cotton analyst.

The financial crisis in the textile sector and heavy imports of lint from India by large spinning groups had dampened demand for local cotton, brokers said.

Many textile mills were partially operating and others are on the verge of collapse, said Mr Usman. He added that huge outstanding funds were blocked in their entire cotton chain and the market was currently suffering from liquidity crunch.

Phutti (seed cotton) prices fell by Rs200 per 40 kg and are hovering around Rs1,600 to Rs3,000 per 40 kg depending on the quality.

The New York cotton finished lower for all the future contracts except maturing March 2016 contract which recovered slightly.

The Karachi Cotton Association (KCA) spot rates were unchanged at overnight level.

Major deals on the ready counter were: 2,000 bales from Haroonabad (Rs5,280), 1,000 bales from Sher Sultan (Rs5,300) and 400 bales from Shujabad (Rs5,575).

Published in Dawn, February 14th, 2016