KARACHI: Easy conditions prevailed on the cotton market on Monday as buyers stayed on the sidelines. Falling cotton prices in the world market and sluggish demand from the local spinning industry kept market devoid of activity.
Floor brokers said that cotton prices touching new low in the New York market and reports that China, which is holding around 30 to 40 million bales, is now poised to dispose them of in the world market were taken as negative developments.
On the other hand, the United States is planning to raise cotton crop sowing area to harvest higher crop next year. This also negatively impacted the market as huge unsold stocks with China so far did not enter the world market and yet prices have been moving down on a daily basis.
“There are deepening economic crisis the world over as China is planning to lay off millions of coal miners and steel workers. This would further deteriorate economic conditions of many countries,” apprehended Naseem Usman, the chairman of Karachi Cotton Brokers Forum.
A large number of open-end mills in Faisalabad have already closed down, he added.
Consequently, the Karachi Cotton Association (KCA) cut its spot rates for second consecutive session by Rs50 to Rs5,200 per maund.
The New York cotton market closed lower to touch a seven-year low of 56.19 US cents per lb. Except for maturing March 2016 contract that closed with modest gain, all the futures closed lower.
Major deals on ready counter were: 400 bales from Yazman Mandi (at Rs5,100 per maund), 632 bales from Burewala (Rs5,200) and 100 bales from Khanewala (Rs5,400).