No deal seen on cotton market as trade resists new tax measures

Mills were conspicuous by their absence on the cotton market on Monday as there seems to be no motivating factors, dealers said. Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 12,500, they said. In Sindh and Punjab phutti price of low type was at Rs 4000 and superior type also unchanged at Rs 5000, they said.
In ready business, not a single deal finalised due to prevailing uncertainties over the tax measures in the textile sector, they added. According to the market sources, since the tax measures announced, the leading buyers kept to the sidelines and huge losses of textile business. They also said that the value-added sector has rejected the new taxes. Under the circumstance, as a whole, all concerned are fed up as imposition of 15 percent surcharge on income and surge in special excise duty from one percent to 2.5 percent causing dullness these days. Besides, withdrawing the sales tax exceptions zero rating on various items, they said.
In the meantime, ginners were not worried as they have nearly 0.3 million bales of cotton to sell, which is not a big deal for them, they said. Besides, according to a report, Brazilian soy farmers planting cotton during the interharvest will need to gather the biggest ever crop of the fiber with clockwork-like efficiency this year to avoid disrupting the harvests that will follow.

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The KCA Official Spot Rate for Local Dealings in Pak Rupees
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FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
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                                    MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
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Rate              Ex-Gin   Upcountry   Spot Rate    Spot Rate    Difference
                    For      Price     Ex-Karachi  Ex. KHI. As   Ex-Karachi
                                                  on 19.03.2011
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37.324 Kgs      12,500       120      12,620       12,620               NIL
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Equivalent
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40 Kgs          13,396       120      13,516       13,516               NIL
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