Import duty rumour sets cotton markets in Pakistan on fire

Rumours that five per cent import duty will be imposed on cotton yarn in Pakistan set the cotton markets on fire on 27 March. The markets swayed on news that recommendation of duty imposition has been prepared and would be put up for approval in the next meeting of the Economic Coordination Committee (ECC).

According to reports, brokers said that rumours regarding import duty helped generate some buying from needy mills which have been avoiding tobuild on their stocks due to dumping of Indian cotton yarn in the domestic market. It appeared that some spinners had indulged in desperate buying and even entered into large lot deals.

Reports showed that cotton seed (putti) prices also firmed up by PakRs100-Rs200 per 40kg. Consequently, price of Sindh variety phutti was quoted between PakRs2,500-2,800 and that of Punjab was around PakRs3,000-3,100 per 40kg.

The Karachi Cotton Association (KCA) raised its spot rates by PakRs50 to PakRs6,600 per maund and trading on ready counter was fairly active.

Meanwhile, world cotton markets remained volatile. The New York cotton futures after touching record high of US cents 97 per pound overnight suddenly came under selling pressure which pushed all the futures lower by wide margins.