Commodities: Cotton extends decline KARACHI: Spinners replenished their stocks on Wednesday amid rapidly falling cotton prices. However, the underlying sentiment remained easy and outlook uncertain.
Floor brokers said higher arrivals of phutti (seed cotton) further exerted pressure on cotton prices as spinners remained apprehensive about sluggish demand for yarn.
Though world cotton markets rebounded on reports of hurricane hitting cotton-growing areas in the US, local market remained under the influence of domestic factors, they added.
Since spinners fear a glut in the cotton yarn market because of slow off-take, the higher arrivals of phutti brought cotton prices under renewed pressure.
Spinners have continued to show their concern over ‘duty and tax remission on export’ scheme which allows value-added textile industry to import fine-count yarn free of duty and taxes. The rising trend in import of cotton yarn under the scheme is a major concern for the spinners, brokers said.
The New York cotton market witnessed surge in cotton prices on reports of hurricane hitting cotton-growing areas. After moving higher by up to two US cents, the market slightly recovered.
Brokers said that even after Eidul Azha, the market is expected to remain under pressure because phutti arrivals will further gain momentum.
The Karachi Cotton Association (KCA) cut its spot rate by Rs100, to Rs5,950 per maund (around 37 kilograms). The KCA has cut the rate by Rs400 in the last three days.
Major deals on the ready counter were: 2,600 bales from Sanghar (Rs5,800 to Rs6,000), 1,600 bales Mirpurkhas (Rs5,800 to Rs6,000), 2,000 bales Shahdadpur (Rs5,900 to Rs6,000), 1,400 bales Hyderabad (Rs5,900 to Rs6,000), 1,000 bales Kotri (Rs6,900 to Rs6,000), 1,400 bales Tando Adam (Rs6,000), 2,000 bales Nawabshah (Rs6,000), 1,200 bales Sakrand (Rs6,000), 1,800 bales Khanewal (Rs6,200), 1,400 bales Alipur (Rs6,000 to Rs6,200), 500 bales Burewala (Rs6,000), 600 bales Vehari (Rs5,900 to Rs6,200), 900 bales Samundri (Rs5,900 to Rs6,100) and 600 bales Haroonabad (Rs5,900 to Rs6,000).