The rate of cotton increased by Rs 200 to Rs 300 per maund. The trading volume increased due to the forecast of rains and long Eidul Azha holidays. The increasing trend in the rate of New York Cotton was seen after the news of reducing economic conflict between China and America. Federal Board of Revenue (FBR) has assured the business community to evolve an automatic system for the transfer of refund amount in 72 hours.
In the local cotton market during the last week due to increase in the buying of cotton by textile and spinning mills the increasing trend was seen in the price of cotton while the trading volume was also increased. The rate of cotton increased by Rs 200 to Rs 300 per maund due to increase of buying by the needy mills; forecast of rains; Eidul Azha holidays; and the increasing rate of dollar. The rate of Banola and Phutti were also increased.
The rate of cotton in Sindh was in between Rs 8650 to 8700 while the rate of Phutti was in between Rs 3800 to Rs 4100 per 40 kg while the rate of Banola is in between Rs 1550 to Rs 1600. The rate of cotton in Punjab was in between Rs 8700 to Rs 8750 while the rate of Phutti is in between Rs 3700 to Rs 4200 per 40 Kg and the rate of Banola is in between Rs 1550 to Rs 1600. The rate of cotton in Balochistan is in between Rs 8700 to Rs 8750 while the rate of Phutti is in between Rs 4100 to Rs 4150 per 40 Kg. Mean while only three ginning factories were partially operational in Balochistan.
Spot Rate Committee of Karachi Cotton Association has increased the rate of cotton by Rs 200 per maund and closed it at Rs 8600 per maund. Chairman Karachi Cotton Brokers Forum Naseem Usman told that in the coming days other than long Eidul Azha holidays the transporters will give priority to the transportation of sacrificial animals rather than transportation of cotton because they will get good fare of transportation of animals.
Moreover, due to the forecast of rains there are chances that quality of cotton will be affected as well as chances of decrease in the supply of Phutti the needy textile mills can increase buying and there are chances that rate of cotton may increase. On the other hand the ginning factory owners are complaining that due to the extreme hot weather there is a decrease in ginning yield and flower shading is the second reason of low ginning yield.
Experts were of the view that trading volume will increase. The arrival of Phutti is increasing in Punjab and new factories are starting their operations day by day. Over all the situation of cotton crop in both the provinces are satisfactory. Due to the increasing trend in the prices of new crop of cotton many mills had increased the buying of old cotton due to which a large quantity of old stock of cotton has been sold. However up till now only sixty to seventy thousand bales have been sold.
Mixed trend was seen in international market. Due to the news of talks from next week for the solution of America and China trade conflict bullish trend was seen in New York Cotton Market. According to the weekly report of USDA the export of cotton has increased but the biggest consumer of cotton in the world China is not talking interest in importing cotton from America due to which the rate of American cotton are not increasing.
The mixed trend was seen in rate of cotton in China while the rate of cotton is decreasing in India despite the low production of cotton. Due to the imposition of 10 percent sales tax on cotton and 17 percent sales tax on textile products by government the business is effecting at local level. Despite the fact that FBR has assured that there will be no delay in the refund of sales tax, the business community is not satisfied because the FBR had not refunded the sales tax of the last three to four years. The government is issuing Promissory Bonds instead of giving cash. The business community has reservations on the condition of buyers CNIC on the transaction of Rs 50,000 is also the reason of low business activity.