Cotton price comes under correction.

KARACHI -- After attaining record high rates last week, cotton prices on Monday came under pressure amid falling business activity. There are no new developments which could be reckoned for downward trend in prices except correction was overdue.

Market sources said the textile industry is currently facing a liquidity crunch owing to heavy duty and taxes at the stage of purchase of cotton and exports.

The industry has to pay 10 per cent sales tax to ginners on cotton purchase and pay 17pc sales tax at export stage and this has squeezed the cash flow of industry used towards working capital, brokers said. Similarly, a huge amount towards duty and taxes is also being paid by the industry on import of cotton which was also blocking huge funds of the industry, sources added.

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