Exporters entry in the cotton market added luster to buying which was threatened by large scale imports from India and elsewhere. The phutti rate reached in Sindh at historic level and spot rate at Rs 2875. Rates in ready business of cotton ruled between Rs 2850 and Rs 2930. The spot rate was down on Saturday to Rs 2850.
WORLD SCCENARIO:
Trading on the NYCE began weakly though reports said China and needy countries were seeking imports. The December contract was marginally up 0.11 cents to 65.11 cents a pound and March a tad up 0.03 to 64.49 cents a pound.
The trading on Monday saw futures moving both ways. The players expected release of USDA reports may have round some direction. Despite days disappoint analysts hung on to belief that prices were expected to remain robust rather may pick up further owing to US farmers sowing more corn and wheat and less cotton.
On Tuesday futures met inevitable and fell as speculative fund sales hurt. Analysts made observation that long holiday in China besides many players remained away to an industrial conference in England caused the dip in demand. They also touched a wait for USDA monthly supply demand report. However, the fact the cotton sowing in 2008 will be down is one hope the players are waiting eagerly.
On Wednesday futures on NYCE were marginally higher as fund buying and speculative short-covering helped market to erase losses. The players observed that fund sales drove the key December contract dip to a critical area of support around 62.10./15 cents but the market bounced from there to end in positive territory. Analysts expectation was that cotton prices will consolidate around these level until release of next weeks monthly supply/demand USDA report.
US cotton plantings in 2007 were at an 18-years low of 11.01 million acres according to USDA report. They said the American farmers are tipped to sow less cotton and plant more wheat and corn among others after strong rallies in both grains this years.
On Thursday mixed pattern ruled as March cotton rose by 0.10 to 67.01 cents. December was up 0.06 to 63.68 cents a pound. The rest lost. Meanwhile the market derived little inspiration from USDA exports sales report that was 100,000 RBS less than last week's shipments were 258,000 RBS against 265,000 RBS.
The softening trend was due to expectations that cotton sowings will be even lower besides the top importers China buyers were enjoying long holiday. Many other prospective players were out attending an industry conference in liverpool.
On Friday bullish trend was seen as December contract rose by 0.66 cent at 63.49 cents.
LOCAL MARKET:
The exporters entry in cotton market infused new life in sales injecting added value taking phutti prices to nearly record level at Rs 1425/50 for 40 Kgs. Cotton prices ruled between Rs 2850/2930. The buying level was better, obviously as spinners millers were added by private sector exporters. The cotton sellers unfortunately had to wait for long to welcome exporters.
It is surprising why growers and ginners enter this way to escape exploitation. Meanwhile India has picked up Pak consumers in Indonesia, Malaysia and Thailand. What is most surprising that where has gone that board in site area saying. Buy Pakistan, be Pakistani'.
Anyway the trading began with 12000 or near about on the first day. The phutti prices looked poised for a jump. The second day's trading did not lag behind and as much bot was lifted though the amount came in the exporters share was not noted prominently. Instead, market sources were up beat about good sales and ginners prices owing to demand following increased export prospects.
On Wednesday arrivals surprised some and disappointed some as they were reported sharply up. The prices may have been anywhere down to the credit of textile millers. It is going to make available certain quantity and likely to save foreign exchange drain out on imports, the regrets for 25 mills stop operation which is why, will perhaps never come to light. Elections are very close and the card can be played and played. The spot however was at Rs 2875. The change of handa were around 12000 bales in the price range of Rs 2900 and Rs 2925.
On Thursday millers enjoyed reports about pouring cotton supplies and prices registering down - the spot rate was down Rs 25 to Rs 2850. In ready where nearly 14000 bales changed hands between price range of Rs 2890/2925. Phutti prices too recorded rise in Punjab to Rs 1325/1375, in Sindh phutti rose by Rs 25 to Rs 1400/1475. However, prices still were restricted due to open threat of huge imports.
On Friday most of the deals were in small lots and prices a bit lower. On Saturday mills continued buying and some deals were made at Rs 2825. Phutti prices also turned lower at Rs 1310-1350 in Punjab and at Rs 1400-1425 in Sindh.
Bt COTTON: FOR BIDDEN FRUIT:
Why is Bt cotton in Pakistan still under experiment or being delayed from offering it a green signal will never be clear. Linked closely with cotton and textile business stare your face if you inquire: why not in Pakistan as Indians are harvesting good gains from Bt cotton - average yield rose there to 501 Kg a hectare from just 308 Kg in 2001. When first put to test. An information was printed in hissing tone that Pakistan had sown some Bt cotton but the yield was under carpet.
Earlier story in Pakistan's newspapers had also said that Bt cotton was still under experimentation and won't be allowed to be cultivated. Why such dubious show up was in the air is hardly reachable. Whose interest is in keeping back Bt cotton instead to display its production worth in fields with traditional cottonseeds.
Govt might be in quandary for too much dependence of the textile exporters on the tax payers money to polish products to be able to sale along with the rivals who have magic wand and produce textile exportables at low cost of doing business. A year or so back in whispers textiles connected people had hinted to replace textile with some knowledge based exports sector. Along with declining trend in textile products, too much banking on the exchequer money and authorities digging projects ignored for the last 60 years. Govt perplexed.
They completely forget the urgent need induct fresh investors in textile business. The textile town, textile cities and garment institution once talked have been forgotten. Good project chemicals town was also to be set up in Karachi and it was so encouraging that textile miller won't soon forget taking often about high cost of ding business.
According to a Reuters report from New Delhi that spoke of India's cotton trade which it said will enjoy a windfall in the new (2008) season as the country's exporters anticipate a longer queue of overseas buyers because of supply shortfalls in other leading producing nations. As a result Indian exporters hope to sell its expected record output at price about 10 percent higher. India is hopefully expecting record output of 31 million bales from present 28 million. It hurts to note the report says India sells cotton to Indonesia, Thailand, Bangladesh, China and Pakistan why? India achieved a jump in cotton field following approval for commercial cultivation of cotton hybrids in 2002 the average yield today is double of what traditional cotton gave the yield from 308 Kg in 2001 to 501 Kg in 2006!
US, EU FAILDED WORLD POOR:
Whoever has a bit of feeling of poor and has courage to speak truth has boldly expressed why the WTO has been victim of dilly - dallying. The globalisation of world trade would have come as a boon for exports, particularly of textile products. But agriculture subsidies by EU and US are blocking the way for safe passage of the promised smiles by promises.
Considering this one strong point as the bane common wealth Secy General Don Mc Kinnon suggested that the US and Europe bore a great deal of responsibility for that, and could and should do a lot more to dismantle unfair subsidies which kept many millions trapped in poverty. He spoke confidently in Delhi for a meeting of parliamentarians from the 53- member group of mostly ex-British Empire nations. "Iif an African leader decided to manufacture TV sets at five times the world prices he would be laughed off the planet yet agricultural products can be produced in Europe at five times the world price and no one says its real problem."
Don Mc Kinnon's statement on WTO has not come in isolation but many world leaders and more prominent of all Bush has also seen some strong moves to give WTO a life and smile for 160 million of world's poor. But such ray of hope has come like flash to a better-day-expecting people, but has faded with the sinking sum.
However, Mc Kinnon's plain statement should serve as warning to leaders of developing countries, particularly India and Brazil that the US and EU's claim they have done enough and given enough is far from truth. If these two see no reason will fail in leading their poor who are simply hoping against hope for centuries that some day they will have enough food, medicines, schooling for family members.
The way league of Nations was replaced by the United Nations, just to serve sponsors ego, WTO has been a creation of a new game to play and play until the other team shown tiredness to continue and give a walk over. Thus what would be end game is beyond developing nations guess.
HAVE GROWERS REALLY FAILED:
Growers had always accepted challenge when increased production was called for, they however never had good going with the consumers. The shortfall in production complaint is not new. It always was there along with nagging about lack of quality. The idea always was behind to create room for imports from round the corner of the world. This more for keeping local growers under perpetual pressure and far obvious reason to pull prices down.
The authorities have always been showing soft corner for the growers .But they have never come with gainful solution when growers made bon fire of the cotton in front off Hyderabad press club and elsewhere very. Lately growers - ginners getting fed up with the buyers nagging about shortfall in cotton or low quality cotton, they linked prices with rates ruling in international markets.
The steps to safe guard their interest, buyers as was being observed by knowledgeable circle, no one but they themselves had forced the growers/ginners to go for more investment for dirt free cotton.
They said that whenever ginners supplied improved and quality cotton, buyers refused to recognise as such and refuse to pay the asked price. On the one side the practice was applied to discourage growers/ginners and, on the other side authorities increased efforts to create culture of contamination free cotton.
A couple of dozens of ginners were set in Sindh and Punjab but authorities who always do the initial work and leave the rest on God never come out whether the mission was accomplished. Efforts to get supply of cotton started acceptable to world class importers but authorities are unable to contradict the ginners who claim their additional investment on making cotton contamination free is never paid.
The authorities are head on plunged into the welfare of the growers which one or the other speak so loudly that finds prominent place in newspaper reports. The authorities, however can do nothing to ensure that every chhatak of cotton lying to gradually at the ginning side rooms are sold by the local consumers who by mid-season start calling on govt to issue permission to buy cotton from round the corner of the world. how far can growers or ginners unwilling to erode prices under pressure to uneconomic level to please the authorities and spinners or millers, sources well-versed in local condition said!
GARMENT CITY IS A COMPROMISE:
The declining trend in exports without facilitation in quite a few ways and package or subsidies, authorities had rightly announced to set up textile towns and textile city. But the authorities picked from the whispers a float in the air that towns and cities are put to back burner and garment city is brought to fore.
The other day a full multi colour page ad announcing "Mazboot Maishat ki Bunyad O Khush Hali Ka Aghaz , Faisalabad garment city company came to waiting people as a slight shock as garment manufactures and exporters needed proper help from govt to scale it up to 3-fold high, which however, was denied politely. The struggle was on right - probably from day one that exporters manufactures of such goods whose exports were discouraging exports of value added goods exports.
Besides garment exporters were trying to convince govt that other product exports were fetching just 5 or 6 cents for a pound while value added goods exports were earning 5 to 10 dollars a pound of products. It would be much better, said knowledgeable sources to established first textile towns and cities which should have been followed by garments city or towers of such thing. The authorities, sources said authorities have come under pressure of those depending on packages.
Now that Faisalabad Garment City Co's groun breaking ceremony. The company is being established by federal govt through fending from the Public Sector Development Programme. It will initially be eight factory units to be constructed on 29.9 acres of land in the first phase. It has been somewhat vague when the project will be completed and when Karachi and other city project will see the dawn. However, it is expected the garment factory will have provision also to keep factories self-sufficient.
If yarn, fabric and allied material will have to be acquired from outside the products will not be competitive and leave negative effect on the foreign investors. Since local investment is so shy in leading textile sectors that the Federal govt had to step in. The project is big enough and until foreign investors find other facilities available, particularly matching the facilities they are offered or are recieving may not land here despite govt efforts to offer best infrastructure facility, trained personnel and facilities to transfer share money to their home-country!
TAIL PIECE:
How efforts of picking up from scratch to develop lagging county is being seeb a desired change in scenario is not too far oft. Sixty years of free hand, or since 70's when progress was halted in the name of privatisation was made govt's strong point then. It was not entirely a matter of just money but an effective would be the enthusiasm that was just beginning to raise its head, was throttled thoroughly.
Several of influential victims of privatisation had either moved to Canada, America or any choicest country, that guarantied safety and security of their investment. The result could be seen as govt thereafter ever failed to mobilise money. Instead govt has to arrange huge subsidies to make exports competitive. Machinery, chemicals and dyes plants could have emerged in private sector had it not been made apprehensive owing to seizing industries in the name of nationalisation.
Money is not what is dragging Pakistan all corners but the fear their settled industries could go out of hand. The present bid to make public and private partnership bill 2007, aiming at funds for mega projects. If the move is given legal effect, it seems a definite understanding is being built up between the govt and private sector with no chance to make private sector apprehensive for any plausible move to harm them!
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