KARACHI: Lacklustre conditions prevailed on the cotton market on Monday as buyers remained away from the trading ring, as dwindling world cotton trade and textiles continues to impact on the domestic market.
Floor brokers said extending the time frame for giving zero-rated status to export-oriented industries till the next budget had badly affected sentiment. The government for the last three budgets had been promising but so far no firm commitment was there, they said.
They added that the textile industry was squeezed with cash flow because around Rs250 billion was stuck-up in duty drawback, sales tax and local taxes and it seemed that the situation would continue until the next budget.
Consequently, spinners had reduced their operations and many were on the verge of collapse, the brokers said, and added that a couple of leading textile groups in Faisalabad had already shut down.
Though ginners have only one million bales at present and next crop is about six months away, there is no buying from spinners as they have cut down their daily shifts. The trading ring gave deserted look and barring a couple of small lot transactions, spinners remained conspicuous by their absence.
The KCA left its spot rates unchanged at weekend level. Major transactions on ready counter were: 400 bales from Vindar (at Rs5,050 per maund) and 400 bales Mianwali (Rs5,500).