The News Papers Staff Reporter
KARACHI: Cotton prices moved further lower on Wednesday amid declining trading activity as millers avoided new deals. Barring short covering originating from some small- and medium-sized textile spinning mills the market lacked trading activity. Consequently, cotton prices came under pressure and closed lower for third consecutive session.
Market reports suggest the textile industry is facing liquidity crunch as the government has not paid sales tax refunds amounting to around Rs80-90 billion in last few months. The falling cotton price also impacted phutti (seed cotton) and cottonseed cake rates which registered fresh fall.
The falling demand for cotton from industry is presenting a recession like situation, observed brokers. On the global front, cotton prices also remained under pressure in the backdrop of prolonged trade negotiations between US and China. The Indian, Chinese and New York cotton all closed easy. The Karachi Cotton Association (KCA) also lowered spot rates by Rs50 to Rs9,350 per maund.