Rains last week raised the prospect of a good cotton crop but temporarily restrained normal trading which was also affected by the TCP tender. The ginners waited for pressure from the textile package on cotton sales, which did not come and, therefore, the spot rate was left unchanged at Rs 2800.
WORLD SCENARIO:
Sharp rise in NY cotton futures was marked as dry spell persisted affecting production and raising prices. Speculator indulged in buying to keep a watch on prices which were bound to go up.
On Monday, October contract rose by 0.55 to 54.15 cents and December was up 0.49 to 55.95 cents a pound. According to growers a high pressure ride was blocking moisture flows triggering a build-up of heat in southern cotton belt.
On Tuesday, trading pattern reversed and setback was seen across the board.
On Wednesday, futures closed slightly softer as most players were waiting for news, which could offer incentive trading pace.
On Thursday, again, speculators and trade indulged in buying and selling but the buying had an edge. As a result, the October contract rose by 0.35 to 53.60 and December was up 0.28 to 55.40 cents a pound. Analysts were so disappointed over the continued dry spell they said the damage had been done.
The USDA weekly cotton sales amounted to 107,500 RBs, higher than traders' belief. The shipment was 463,400 RBs, higher than expectations. October contract was up 0.10 to 53.73 and December up 0.14 to 55.54 cents a pound.
LOCAL TRADING:
Small shower, TCP tender for cotton sale, and steady reports from world cotton belts all influenced the trading on the local cotton market. Ginners left the spot rate unchanged, as 36,000 bales tender, floated by TCP, hit the ginners' sales. Sporadic rains also temporarily stopped trading as picking and transportation slowed.
On Monday, not a single bale was sold.
On Tuesday trading also there was there was no business transaction. Spinners, having enough stocks, sat on sidelines, only to lift when ginners would quote a 'reasonable' price. The moderate appears to have been keeping control over price fluctuation in a highway. This is however a temporary phase and trading is likely to pick up as huge package will definitely prompt millers to by. The textile exporters have quietly promise bound to push regional aggressive sellers of products side wards.
On Wednesday also the millers remained on the sidelines watching prices to go down under pressure of TCP tender. However, around 600 bales were lifted by needy spinners. Spot rate was unchanged, and rates in ready were between Rs 2480 and Rs 2500.
On Thursday, trading remained sluggish while some lots were lifted. The news from TCP side was that every scratch had been offered to buy, that is all 36,000 bales. The offer for quality lots was Rs 2376 per maund and lowest was Rs 2261. Nearly 1000 bales were sold on the market ranging from Rs 2450 to Rs 2500. On Friday, there was no big activity as millers were tackling the tender from TCP. Spot rate was unchanged at Rs 2500, while on the market, cotton was sold at Rs 2565 and Rs 2575.
THINKING ABOUT THINK TANK:
Better late than never! That somebody took the initiative to create a think tank was a right step taken in many years.
This term 'think tank' was not unheard of in this country. This might mend the ways of the country. But in Pakistan this was ever in use is certainly unheard of Now gradually go seeds resting in the fertile tank of this country is being unearthed. In fact, quite a good word and work ahs at intervals are being unearthed or brought on surface, but probably sorry is not the right word to has not worked.
Now since a think tank has been given existence, people may expect Pakistan to be shortly brought on the right track. It is now up to the Planning Commission chief to do the tricky job. It would require that growers and others related with agriculture, engineering, mining exports, imports all supply correct data and, of course, the FBS. This is a thing that will hardly be possible to show improvement. Overall change in outlook is a must. Who will help in this? Well, it may be possible just as the Planning Commission, thank God, met after 22 years, and came out with the 'Think Tank'!
Some analysts expressed hope that there would be more such meetings.
BESIDES HUGE PACKAGE:
On demand of the textile sector, the govt it a Rs 25 billion package. This has opened the Pandora's box as every other section of the trade has started coming up with its demand rather complaining of having been overlooked. Commercial exporters of fabrics and home textiles have shown resentment on exclusion from R&D benefits. In a letter to PM, M Rafiq Khan, secy gen Pak Cloth Merchants Association, has said that the issue is a matter of life and death for commercial exporters. He said that commercial exporters have been deprived of R&D facility, which would render them uncompetitive. This decision would be disastrous for them.
In another report the hosiery manufacturers referred to refund cases, claimed to be in crores of rupees, and asked that these should be resolved by next month. The chief of collectorate of sales tax appeared convinced after discussion and assured him that all refund claims would be resolved on priority basis. The matter would be examined carefully and cases with no hanky-panky would be resolved as soon as possible.
NOT TIRED OF THAN KING:
On July 24, 2006, thanks were extended in the name of Pakistan Textile City Ltd, Karachi, with no exact address. Whether land has been acquired and, if so, developed and given to blooming investors is still a speculation. Unfortunately when the idea had not passed infancy stage, some exporters with major investment from somebody else's pocket, or poor taxpayers, had objected. Since then the work on it has been very slow or, to be true, textile city is presumably more in talks and in papers rather than on the ground.
Now that the textile sector is on the receiving end, superlatives are being used. A new joy breathed in the mention of city textile mills, Karachi, which gives and air of hope. God bless latest addition is 'carpet city'. Will textile city mention go chemical or dyes city way. God forbid if so happens. Pakistanis are very determined people. All should remember when crisis bedecks them. Time is ripe to plan things, not to hoodwink innocent but to produce goods, jobs and smiles.
TAIL PIECE: The time has greatly changed, and so the situation. Hence, one can expect the yarn and grey cloth exporters would listen to Europen experts serenely. Over a decade back, experts invited to textile seminar or workshop would ask exporters to get rid of merely low count yarn exporting because "you are cotton producing country". The time and situation have been far more critical today due to WTO rules.
The Export Promotion Bureau (EPB) has invited Dielmar Stiel (Avanz) management consultant an international consultant in textile and garment sales to speak to the 'in trouble' textile exporters. The EPB seminar will cover South/East European markets for textiles and accessories and garment industry from Pakistan.
The idea behind the seminar, on August 1, 2006, is to facilitate and assist the textile and clothing sector. Those in the textiles know the advent of lame duck WTO has brought world of difference in competition today. Much of the bitterness is known to the exporters. The consultant (expert) would like to generally used to low count yarn exporters to turn to value-addition such as garment and hosiery and towels. He will tell Pak exporters how they can win the markets in the South East European countries. After such big Rs 25 billion package, exporters are under pressure to export products worth the package.
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