Cotton prices remained under pressure on Monday, January 8, 2018, as spinners stayed away from the trading ring. The government decision regarding the withdrawal of duty and taxes on lint imports has suddenly turned the market in buyers favour.
Ginners who had been reluctant to sell cotton at higher rates only a few days ago are now left in a lurch. There were selling bids but spinners were conspicuous by their absence. As a result, cotton prices moved lower and very little activity was recorded due to lack of buying interest from spinners and exporters, brokers said. The removal of duty and taxes on import of cotton has been timely because a large number of Pakistani exporters are participating in Heimtextil, Frankfurt (Jan 9-12), which is the largest trade fair of home textiles.
The market looks upbeat as a lot of developments have taken place in favour of textile exports including the prime minister’s incentives package and withdrawal of 4 per cent customs duty and 5pc sales tax. As said by Director of Karachi Cotton Association Mr Adil Naseem”these factors have boosted the confidence of Pakistani exporters who are set to book large orders at Heimtextil.”
While on the other hand the erosion in the rupee value against US dollar will be in favour of country’s exports as it will help Pakistani products become more competitive in the world market, he added. According to the market sources around 2.2 million bales were booked by spinners from US, Central Asian Countries and West Africa earlier in the season. These consignments are expected to arrive in coming days whereas Indian cotton has already landed at the Karachi port.
In short, all these developments are in favour of the value-added textile sector which is the largest foreign exchange earner of the country and also provides a large number of jobs in major cities. The KCA spot rates were lower by Rs100 to Rs7,700 per maund on Monday, January 8, 2018.