Higher asking prices keep buyers away from deals on cotton market

Slow business was witnessed on the cotton market on Monday as mills kept to sidelines due to higher asking prices, dealers said. The Karachi Cotton Association (KCA) official spot rate was left unchanged at Rs 8,650, they said. In Sindh price of new Phutti was unchanged at Rs 3950 and in Punjab rates were at Rs 4000-4100, they said.

In ready business trading came down as a result of rise in the asking prices by the ginners, nearly 400 bales of cotton changed hands at Rs 8800, they added. Market sources said that trading activity was slow as mills were on the sidelines just to observe the latest development after the sharp fall in China cotton future and they are also keeping an eye of the direction in the NY cotton futures.

They said that the mills may start trading, if local prices fall in the near future. The ginners were ready to lower the asking prices as they do not want to lose profit of margin. According to a report, China's cotton futures dropped five percent on Monday, while US cotton lost around four percent as a cut in import duty announced by Beijing on some textile shipments and concerns over the global economy weighed on the market.

China cut import tariffs of some cotton products such as cotton cloth to six percent from 12 percent, effective July 1. The world stocks and commodity markets fell on Monday as investors went on the defensive ahead of a Greek austerity vote this week that may sow stronger doubts about financial stability and economic recovery.