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KARACHI: The local cotton market remained stable on Thursday. Market sources told that trading volume was low.

Cotton futures fell for the second straight session on Wednesday to a one-week low as the dollar firmed, while a subdued sentiment in wider financial markets also weighed on the natural fibre as focus turned to a federal export sales report.

The cotton contract for March fell 0.76 cent, or 0.9%, to 80.95 cents per lb by 1:40 p.m. EST (1840 GMT), having earlier touched its lowest since Jan. 20.

“We have a stronger dollar today and a weaker stock market” which is weighing on the cotton prices, said Peter Egli, director of risk management at British merchant Plexus Cotton.

Global equities fell and the dollar rose as investors turned more cautious of stretched stock valuations and the economic impact of the COVID-19 pandemic, with the Federal Reserve meeting later in the session.

Cotton Analyst Naseem Usman told that Federal Board of Revenue (FBR) has strongly opposed a proposal of the textile sector for the restoration of zero-rating regime or applicability of lower rate of sales tax on five export-oriented sectors.

Sources told Business Recorder here on Wednesday that exporters have approached the prime minister and different parliamentary committees with the proposal to restore the sales tax zero-rating regime in the budget (2020-21).

The alternate proposal of the industry is to reduce the sales tax rate from 17 percent to a lower percentage like five percent on the five export-oriented sectors.

However, the FBR has taken the principal stance for not withdrawing the sales tax regime from the export-oriented sectors.

According to the sources, the FBR can only propose to the policy makers and the final decision would be taken by the government.

The issue of zero-rating regime was discussed during the last meeting of businessmen and exporters from Sialkot with Hammad Azhar, Minister for Industries and Production, and the FBR officials at the Ministry of Industries and Production few weeks ago.

During this meeting, the senior officials of the Ministry of Industries and Production had informed the exporters that the government would consider possible restoration of the zero-rating regime during the budget preparation exercise for the next fiscal year.

The ministry has conveyed the concerns of the exporters to the Ministry of Finance as well as the FBR.

Meanwhile Towel Manufacturers Association of Pakistan has urged the Prime Minister Of Pakistan to take the notice of the suspension of the gas supply to the export oriented industry from March 2021 and suspension of gas supply to general industry from February 21.

Towel Manufactures Association has appealed to immediately ban yarn export as reduction in cotton production and export of cotton yarn has already put the export oriented in difficulty.

Commercial Attache of Turkey, Eyup Yildirim, has said that Turkey will provide full support to businesspeople from Pakistan for opening business offices in Turkey and this will be a move under the Strategic Economic Front (SEF) between the two countries.

Replying to different questions from members of executive committee of Pakistan Yarn Merchants Association (PYMA) during a meeting, he said that the proposed Free Trade Agreement (FTA) between Turkey and Pakistan and MoU are major developments in the bilateral trade and demands raised by PYMA will be met.

Turkish Consulate in Karachi and PYMA have also agreed on joint efforts to boost bilateral trade and investment ties.

In this regard, new avenues for investment in various sectors of the economy will be explored and attention will also be paid to the exchange of trade delegations.

He further said that Turkey and Pakistan will work together for the promotion of yarn, fabric and textile industry whereas initiatives will be taken for meetings between businessmen of both the countries on quarterly basis.

Naseem Usman told that 600 bales of Dharki were sold at Rs 10,800 per maund and 400 bales of Saleh Pat were sold at Rs 10,400 per maund.

Naseem also told that rate of cotton in Sindh was in between Rs 10,000 to Rs 10,700 per maund. The rate of cotton in Punjab is in between Rs 10,200 to Rs 11000 per maund. He also told that Phutti of Sindh was sold in between Rs 3800 to Rs 5000 per 40 kg. The rate of Phutti in Punjab is in between Rs 3500 to Rs 5400 per 40 Kg.

The rate of Banola in Sindh was in between Rs 1600 to Rs 2000 while the price of Banola in Punjab was in between Rs 1800 to Rs 2250. The rate of cotton in Balochistan is Rs 10,000 per maund.

The Spot Rate remained unchanged at Rs 10,800 per maund. The Polyester Fiber was available at Rs 193 per Kg.

Copyright Business Recorder, 2021

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