Domestic markets, US futures: Increased buying by exporters, mills helps all-round increase

Trading in cotton has improved despite prices continued to rise. Had the bid to involve TCP succeeded, market scenario change would have been more favourable. Spot rate opened at Rs 5400, while closing was marked at Rs 5,500.
WORLD SCENARIO
It is a delight to disseminate currently unheard news that Cameroon State in Africa's peasants is happy with what they are getting from cotton. Cameroon State firm Sodecotton increased farm-gate raw cotton price by 27.5 percent in order to dissuade farmers from smuggling to Nigeria. Sodecon said it will pay farmers 255 CFA francs ($0.50) per kg of cotton this season from 200 CGA per kg in the previous season.
About 16 percent Cameroon's total output of 161,000 tonnes in 2010-11 was smuggled into Nigeria where farmers were paid almost twice what they got in Cameroon.
Data showed Cameroon's raw cotton production rose 47percent during 2010-11. In Cameroon, farmers plan to raise pre-financing from 33.8bn CFA francs from 24 billion CFA to lost production. Against this, US farmers with rate down $ one or even less, have eyes on Corn and Soyabeans.
Key imports like fuel make cotton abhorring. The players could see cotton at 85 cents could compete with corn and soyabeans. Meanwhile, Beltwide cotton has begun gauging things to come. In Pakistan, seedcotton arrival pace keeping growers optimist.
However, the price angle gives growers worry. The TCP is unlikely to extend support any time soon. Most of the cotton growers country have bagged enough to deliver to needy countries including Pakistan.
On Tuesday, cotton futures finished up and at a 1-1/2 week high, fuelled by sharp gains in agricultural commodities across the board and expectations of buying related to index re-balancing. Key March cotton futures went up four cents or 4.4 percent to finish at 95.80 cents a lb, dealing from 91.85 to 95.80 cents. It was the highest settlement for cotton's spot contract since November 17, Reuters data showed.
Traded volume on Thursday was around 25,000 lots, almost doubled its 30-day norm, Thomson Reuters preliminary data showed. Other report said that the global cotton stocks could rebound after two tight seasons as China rebuilds its stockpile in 2011/12, an international farm group said on Tuesday. International Cotton Advisory Committee secretariat said in a monthly report that a total of 2.1 million tonnes of domestic cotton were purchased for China's reserves between October 8 and December 30, 2011.
Reports indicate that about one million tonnes of non-Chinese cotton also will be added to the reserve, which was almost exhausted by the end of 2010/11, ICAC said. This could help send global cotton stocks up 32 percent to 11.9 million tonnes by the end of 2011/12, the group said.
US farmers are expected to plant less cotton in 2012 as a decline in prices to below $1 per lb and escalating costs of key inputs such as fuel make it more attractive to sow corn and soybeans. US cotton plantings will range from 12 million to 13.5 million acres (4.9-5.5 million hectares), down eight percent to 18 percent from last year's 14.72 million acres, industry participants forecast before the annual Beltwide Cotton conference here.
On Wednesday, NY cotton futures closed higher as index buyers and speculators bought the fibre along-with other commodities for the second trading day in 2012. Benchmark March cotton futures ended 12 cent higher at 95.92 cents a lb. The session range narrowed to 94.75 to 96.48 cents. The contract reached its loftiest level since November 18 and settled at its highest since November 17.
Traded volume on Wednesday came 13,161 lots, about 64 percent higher than the 30-day average, Thomson Reuters preliminary data showed. Reports said that China's cotton imports, world consumption and the gyrations of the global economy will be the prime factors driving cotton market prices in 2012, a senior official said on Wednesday.
Mike Quinn, the president and chief executive of the Carolinas Cotton Growers Co-operative, said, at the annual Beltwide Cotton conference, a number of factors will influence price direction in cotton futures on the ICE Futures US exchange.
On Thursday, cotton futures ended with moderate losses, but held onto the higher levels achieved during the first two sessions of 2012, as investors paused to absorb the recent gains.
Benchmark March cotton futures finished with 1.18 cent gains at 94.74 cents a lb. The trading band ran from 94.38 to 95.92 cents, near the top of the range built so far in 2012. "Since December 14, which is the low, we've rallied 1,200 points and since the start of the year we've rallied 450 points. So, to sit back down 100 points is nothing alarming," said Keith Brown of Keith Brown and Co. in Moultrie, Georgia, noting that cotton fell along with other commodities, as participants focused on taking profits and dollar strength.
In mid-December, benchmark cotton prices slid to lows dating back a year and have been climbing ever since. By Wednesday, the contract reached its highest level since November 18, surging nearly four cents.
On Thursday, cotton futures ended with moderate losses, but held onto the higher levels achieved during the first two sessions of 2012, as investors paused to absorb the recent gains.
On Friday, the NY cotton futures closed the week strong, holding solid gains to the finish, despite selling in other commodities and tepid weekly export data, as a drought and a healthy US jobs report supported the longer-term view. Benchmark March cotton futures ended the week at their second highest level since November 17, rising 1.12 cents to settle at 95.86 cents a lb.
LOCAL TRADING
On Monday, cotton prices ruled firm ahead of ECC meeting, PCGA reported. The spot rate remained unchanged at Rs 5400, seed cotton prices in Sindh ruled at Rs 1700 and Rs 2300 while in Punjab they were at Rs 2000 and Rs 2700. The consumers lifted 12,000 bales at Rs 4500 and Rs 5500.
On Tuesday, rise in phutti arrivals caused spot rate to contract - down by Rs 50 to Rs 5350. The PCGA fortnightly report put production at 12.03 million bales - leading to overall production at 13-14 million bales. The TCP was to shop up its presence following ECC green signal. But the easy tone and ECC silence seems TCP will enter, if at all, at-least a fortnight hence. At the moment, TCP is too busy with Sugar and Urea. Any way, 14000 bales of cotton changed hands at Rs 5000 and Rs 5500.
On Wednesday, domestic cotton prices trail global trend. The spot rate as a rebuilt was up Rs 50 to Rs 5400, seedcotton in Sindh did around Rs 1800 and Rs 2300 while in Punjab they ruled at Rs 2000 and Rs 2750. The consumers lifted around 20,000 bales at Rs 3600 and Rs 5,550. The resounding talks about entry of TCP to help growers (zamindars) and ginners have in due course subdued. However, global high rate has greatly inspired players who are viewing return of good days.
On Thursday, exporters buying pushed volume higher, adding support to prices. Spot rate was up Rs 50 to RS 5450. Seedcotton in Sindh was doing at Rs 1700 and Rs 2350, while in Punjab they ruled at Rs 2000 and Rs 2750, exporters plus buying pushed level at 30,000 bales at Rs 4000 and Rs 5600, besides dollar China eye on imports causing rise in prices. However, overall prevailing morbid economic condition will determine how trading and cotton prices fare ahead.
On Friday, continued buying by mills and exporters, and unprecedented rise in the dollar value boosted prices. The official spot rate maintained upward trend, raising by Rs 50 to Rs 5,500. Prices of seedcotton in Sindh were at Rs 1700-2350 and in the Punjab at Rs 2000-2750. In ready dealings about 30,000 bales of cotton changed hands at Rs 3,700-5,700.
On Saturday, exporters and mills' demand pushed cotton prices sharply higher. The official spot rate was maintained at overnight level at Rs 5,500. Prices of seedcotton in Sindh were higher at Rs 1800-2350 and in the Punjab up at Rs 2200-2800. In ready dealings about 30,000 bales of cotton changed hands at Rs 4,900-5,850.
Protest against gas suspension
If authorities have found some way out, Aptma members would not only be relieved, but protest against gas suspension will lead to harder work and exports of made-ups.
Chairman Aptma Punjab, Ahsan Bashir expressing regret, said the billion dollars, industry was on the lowest priority of the government, unmindful of the economy that will be hurt as a result, besides staking futures of millions of workers already faced with two square meals problem.
Group leaders Aptma, Ejaz and Ahsan Bashir together told a big gathering of print and electronic media persons that thousands of textile workers are already protesting, but no cure is forthcoming, would be followed by sit in. The loss to economy and exchequer, they suggested, could be saved by stopping CNG gas supplies for three months and by reducing the rate of petrol by 50 percent for one month to facilitate motorists. There, 50 percent gas saved could be provided to the textile sector while the rest of the 50 percent could be given to the gas run IPPs. Thus, they said saving this in power generation cost would alone compensate the government subsidy on petrol.
They said the organisation has tried to avoid confrontation and ready to even 3.5 days of gas supplies to SNGPL. The cornered textile entrepreneurs have now decided to join hands with workers and start agitation.
Where gas curtailment will lead textile sector to
The textile manufacturers and exporters who have been supplementing economy throughout in a big way have finally laying weapons down. They now talk in terms of sector facing ruination to an extent they hardly expected during the last decades. Sporadic cases of probably the youngish warm blood running through veins are being attracted to golden calls from left and right for relocation.
Bangladesh itself not overflowing with gas and energy has been successful in pocketing one or two, countries in Africa, particularly South Vietnam and Malaysia.
The sad story told from the textile leaders who have fought back to survive since decades have so to say; the policy of the government relating to gas is unfortunately ruining the already over burdened textile export sector. Leaders have called for supplying gas on special priority to ensure inflow of precious foreign exchange for the exchequer and employment.
They reminded globally industrial sector is placed first on the list of government policies. In view of the tough competition, they pointed out, regional countries are providing all key facilities, incentives to their manufacturing sectors facing severest ever shortage of energy. However, how consoling would be PM's these words "government to be abide to avoid power loadshedding before end of tenure", needs courage and patience to wait.
ECC decision on TCP buying vastly unproductive
Barring some ways, cotton and cotton trading present one and same enigma every year, but all concerned growers, ginners, consumers behave they are baffled. Knowledgeable sources have always suggested one or the other way to agree and settle the matter.
Sitting across the table enables disputants to get at tricky point. Delay in approaching authorities, who keep busy in multifarious state work, consumes more costly time and when approached materialises a solution is not instantly present.
When ginners started expressing annoyance over declining cotton prices and looked around for some solutions - the solution hurled back was to wait for week happily it was shortest break - only a week. The Prime Minister has scores of problem to deal with and when he found that or somebody else was to do the job he took another one week. The PM okayed buying cotton by the TCP and instantly pushed cotton prices higher by Rs 200 to Rs 30.
No doubt, the decision profited some while some cotton had to bear the cost that certainly was not desirable. Besides, market mechanism way is open for ginners, as sources said were free to export. There are cotton exporters they could be mobilised to go for beyond orders in their hand. Sources, however, wondered that at this hour 94 percent cotton has reached ginneries whatever was in the fate of growers (small ones) had gained. Now onward either the profit, sources said, will go to hoarders or those who still has been left some cotton crop, not the small growers.