Textile industry in low cotton

Depression prevailed in the cotton market while Textile Sector would be benefited by receiving Rs 13 billion in the budget 2012-13. The Karachi Cotton Association kept the spot rate unchanged at Rs 5,600. In ready business approximately, 1400 bales of cotton changed hands between Rs 5400-6000. The rate in Punjab and Sindh is between Rs.4700 to Rs. 5700.
According to the market sources, the cotton traders were hoping that the activity may improve in the coming days as the dollar’s rise was attracting the exporters. Sharing the same views Naseem Usman appreciating the government’s decision to withdraw five percent sales tax (ST) on sizing, weaving and warping sectors and allow sales tax zero-rating facility to these sectors of the textile chain in budget (2012-13). In fact, despite pessimism about the world and country’s economy and political conditions, at the end of third quarter of out-going fiscal year, the textile sector has earned over nine billion dollars, indicating that the country may achieve better earnings from the exports of ready-made garments and cloth.
Naseem Usman said that upward trend in the dollar likely to help in reviving the exports activity as some importing countries were taking interest in purchasing cloth of good quality.
The ginners, who were worried about the resent fall in the prices of cotton, trying to sell at the prevailing rates just to get rid of fears of losses, they said. They said that decline in the cotton prices, particularly in the NY cotton market where, within a year, the rates came down from 2.27 dollars per pound to 70-72 cents.
Thus, within 45 days, NY futures lost nearly 16-18 cents per lb to 70-72 cents, which propelled the ginners to sell to save themselves from the future losses, he said.