Cotton buying steps up

The cotton buyers slightly stepped up buying towards the middle of the week as sellers appeared defiant to sell below their investment, during the week ended on August 28, 2004, relevant sources said.
The official spot rate that fluctuated right from the day one closed almost unchanged at Rs 2275 without Rs 50 upcountry expenses.
WORLD SCENARIO: The world cotton futures depicted deep fall in New York despite traders bid to take prices to uphill course. But the weak fundamentals, particularly the record crop in both America and China.
The experts believe that the bulls will gradually see a retreat unless setback in crop is seen or export demand rises. The futures October started at 50.60 cents closed at 47.90 and December which opened at 51.42 closed at 48.44 cents a pound.
The opening session on Monday saw modest losses in both the futures. That crop having escaped the storms/rains in major producing belts was behind the weakness in futures.
On Tuesday the futures closed slightly up although a hefty short position by funds would likely keep nudging the market higher for short term.
Analysts said that heavy automatic buy orders are believed sitting just above 52.50 cents basis distant December. On Wednesday futures settled near their session lows on options related and speculator selling.
Fundamentally the market is looking at bumper crops in China and United State. Market waited for the US weekly exports sales report soon. Speculative and automatic sell orders pulled cotton future down on Thursday.
Traders said futures had banked on aggressive speculative to rise to its highest level in two months, but analysts to said the inability of benchmark December to race past 52 cents induced those who bought futures to dump fibre contracts. Towards the close of week futures stayed vulnerable on Friday they closed lower on speculative sales but trade buying pared losses as most players appeared to be biding their time waiting for market moving news.
Cotton expert said market players would be closely monitoring growing conditions both in the US and around the world.
They observed that the upcoming month of September will make or break the USDA estimate of 106.6 million (480 Lbs) bales not at or above. Brokers expected support for December delivery lies at 47.50 and 46.80 cents with resistance at 48.50 and 49.20 cents.
LOCAL TRADING: The expectation of bumper crop has geared buyers sellers how to manipulate so that best could be obtained.
The buyers had just slowed down lifting to pressurise ginners further and even further let prices down.
Best phutti supplies have been restrained and the whispers have started regarding possible pest attack. The pressure shifted towards buyers who rushed for buying at rising prices. Spot rate raised to Rs 2275 without upcountry expenses.
On Monday the trading was marked though modestly showing market is alive. The official spot rate was raised by Rs 50 to Rs 2300. The spinners responded with comparative silence failing to guess the sellers were up with something to counter them.
The next day trading got a boost as spinners weakened to reality and laid down hands on nearly 5000 bales, a trend that sellers had provoked. The prices in ready were Rs 2300 per maund or slightly above. The ginners must have thanked God for spinners return.
Following day a couple of big deals were struck as ginners relaxed prices manifested in the officials spot rate by Rs 50 to Rs 2250. The coming of TCP was resounding but it is at the moment indulged in paraphernalia.
However, slight downturn was also seen in ready-sold at Rs 2275/2300. On Thursday in view of the spinners buying interest spot rate was again raised by Rs 25 to Rs 2225. In ready however, purchases continued above spot rate at Rs 2300 and Rs 2325.
Heaviest rush by spinners was seen on Friday as spot rate was sharply increased, besides prices were still much less. In ready rates prevailed at Rs 2275/2350. Whispers started in the market that pest attack was marked.
However, when and where has pests appeared was not specified. But it made spinners pro-active to buy good quantity on Saturday session saw good bit of trading as prices ranged between Rs 2275 and Rs 2350.
Spot rate was unchanged sources said fluctuating prices would restrain the flow of and on. But spinners are in need of cotton and they will not be able to completely sidelined.
TO EARN MORE: The more textile exporters of all types and varieties are considered for every possible facility to strengthen their hands would help volume rise of quality products and thereby fallen exchange earning.
The knowledgeable circles have been overly upbeat about achieving export target and even excelling target.
Certain press reports are manifesting that efforts have been expedited to meet challenges after January, 2005.
This is heartening and important step forward to boost textile products blended with PSF fibres to get higher duty drawback. The exporters obviously jubilant over the ECC decision which they are claiming was their outstanding demand. Since CBR cut drastically sometime back.
The extent of drawback rise has not been mentioned but spinners and exporters reaction is so spontaneous following announcement on TV/Radio that size of the boost might have been in your knowledge.
The authorities have been drawing attention of the textile big ones. Particularly garment makers/exporters have been invited to propose how best government could help them.
However, the sources were of the view that slightly upward moving economy wont be able to part with unlimited money to beef up the efforts of exporters.
They recalled that some time back when government had developed some differences with textiles top men, the sector had hurled threat that manufacturers/exporters had only 15 percent involvement in the business.
Unfortunately Pakistani exporters and manufacturers do not have their base very strong. Everything that textile sector needs to make products export worthy, except cotton are dependent on imports.
Pakistan cotton growers can do to produce cotton enough to feed the expanding mills, but they cannot offer textile manufacturing plants, produce chemicals and dyes without which one cannot think to enter world market with as much confidence India and China can because of the stated reasons, sources said.
MEETING CHALLENGES: Almost a decade back when Pakistani experts returned from Morocco mega meeting where WTO was given green signal for global tour, discussions and adjustments and adoption after January 1, 2005, they knew little what it would prove to be.
Many apprehensive people among exporters, manufacturers and newsmen clearly charged that Pakistan may have signed the WTO document but without going through them what to speak of understanding them. Where and how it will hit bewildered people ask even today.
Even after that Pakistanis enjoyed attending so many so call "rounds" in Brazil, America, India and Doha and more recent in Cancan and Geneva, they could gather lukewarm knowledge and they certainly knew little whether subsidies to agriculture will ever be taken back by projectors of WTO world trade order.
Now less than six months to go, when WTO system will all its furry will stream into global trade artery, textile millers have claim of Rs 4 billion investment in repair, renovation and imports of discarded machinery in countries where they are locally produced.
Pakistan will face tough time in marketing their products, as 55 years have been lost in floating over river water surface rather dipping deep into unfathomable sea bottom. Sources were quite confused. They alleged investment is not the temperament of Pakistani exporters and manufacturers.
Take textile sector for example it needs full fledged plant which has never been conceived. Can you cite example of requisite dyes and chemical being produced in the country to meet 100 percent needs, even after than 55 years of existence, Pakistanis are happy to travel to Europe, China and even India to procure best of stuffs.
Many will remember when Pakistan had to meet aggression, when it approached friend for planes, tanks, etc, friends sidelined for neutrality sake under the circumstance when Pakistan has fully geared itself for eventuality how can you expect to sweep the world after 2005. Has Pakistan enough labs to test the products to see whether they will be received the hot cakes for quality reason, they said.
TAIL PIECE: Good news China and Pakistan agreed to co-operate in developing garment cities and additionally good that China is also ready to jointly market textile products.
Pakistan, however, has asked exporters to propose in specific terms. Indian team is also currently in Pakistan has also expressed to co-operate and share each others experience.
Impressed with working and quality of a garment manufacturing unit Indian team offered to PRGMEA exporters high quality of synthetic fabrics and silk to manufacture garments. The team hastened to assure that it will also import quality textile products from Pakistan. Both offers are worth consideration and before its too, late!