Trading tempo remains smooth, prices in line with global trend; KCA raises spot rate to Rs 5,600

Cotton trading was marked going smoothly at favourable rate, though global trend at times irked buyers. The spot rate opened at Rs 5500 and fluctuated until closed at.
WORLD SCENARIO
China's nearly mopping up cotton during the month of December totaling 790,400 tonnes, nearly 70pc higher from past year impacted price. China wishes buying should not be made excuse for price surge. The US cotton growers were still undecided about price - higher the production estimate the lowest acceptable price was $1 a pound - or slightly less. Many considered selling cotton at 90 cents, side by side with cotton just in case same mishap occurred. The light minded people however were akin to go for oil and precious metal to keep loss away.
The share was dividend depending how big land holding was with growers, India has been satisfied with the stock which they could sell that up to nearly two million bales, still textile mills could cater to entire need for textile products.
Turkmenistan produced around one million tonnes, all meant for exports. Local consumption of cotton is just nominal when India some how failed to deliver to Pakistan one million bales, this country made available much to the relief of Pak textile manufacturers and exporters. Gradually cotton growers in Africa are opting for cotton production though they have to manage input cost and return.
On Tuesday the NY cotton futures settled at a two-month high on speculative short-covering driven in part by news that sowings in leading consumer China may be down sharply in 2012. Benchmark March cotton futures rose 2.72 cents or nearly Three percent to finish at 98.19 cents per lb, dealing between 95.67 and 99.47 cents. It was the highest settlement for the spot contract since mid-November, Thomson Reuters data showed. Volume jumped to around 31,000 lots, more than double the 30-day norm, according to preliminary Thomson Reuters data. News that China's cotton planting area in 2012 is expected to fall 10.5 percent due to reduced profits aided sentiment.
On Wednesday the NY cotton futures settled at a two-month high on speculative short-covering driven in part by news that sowings in leading consumer China may be down sharply in 2012. Benchmark March cotton futures rose 2.72 cents or nearly Three percent to finish at 98.19 cents per lb, dealing between 95.67 and 99.47 cents. It was the highest settlement for the spot contract since mid-November, Thomson Reuters data showed. Volume jumped to around 31,000 lots, more than double the 30-day norm, according to preliminary Thomson Reuters data. News that China's cotton planting area in 2012 is expected to fall 10.5 percent due to reduced profits aided sentiment.
On Thursday the NY cotton futures settled slightly firmer on investor buying as the market appears to be consolidating ahead of a government sales report on Friday, analysts said. Benchmark March cotton futures rose 0.64 cent to end at 98.17 cents per lb, moving from 96.76 to 98.50 cents.
The close was within a hair of the Tuesday close in the contract of 98.19 cents, the highest settlement for the spot contract since mid-November, Thomson Reuters data showed. Volume on Thursday hit almost 14,500 lots, less than two percent above the 30-day norm, according to preliminary Thomson Reuters data.
0n Friday the US cotton futures finished at a four-day high, finding firm footing from surprisingly healthy export sales shown in a government report, analysts said. Benchmark March cotton futures advanced 0.43 cent to settle at 98.60 cents per lb, after setting a higher low at 97.41 and a higher high at 98.70 cents. The contract closed at the four-day high, building on the uptrend that began at the 17-month low hit on December 14. Friday's volume declined to 8,939 lots in late business, well below the 14,500 lots traded late on Thursday, according to preliminary Thomson Reuters data. Friday's volume was about 12 percent above the 30-day average but 16 percent below the 250 day average.
LOCAL TRADING
On Monday prices on the cotton market turned lower in subdued demand and China not in buying mood globally owing to lunar year holiday impacting prices. Spot rate was unchanged at Rs 5500, phutti in Sindh ruled at Rs 1800 and Rs 2350, in Punjab did at Rs 2000 and Rs 2600. Buying in ready was marked at 4000 bales at Rs 4500 and Rs 5600.
On Tuesday spot rate was pulled down by Rs 100 to Rs 5400, seedcotton Sindh ruled at Rs 1800 and Rs 2350 while in Punjab same were quoted at Rs 2000 and Rs 2600. In ready 11,000 bales of cotton changed hands at Rs 4300 and Rs 5600. Meanwhile ginners were not satisfied with the return growers and they were getting. They still are calling for TCP entered market and start buying which they hope would stabilise the price.
On Wednesday the prices recorded a rise keeping an eye on global trend, offering some relief to ginners who are making efforts to induct a third buy - in this case TCP. Meanwhile spot rate was upped by Rs 100 to Rs 5500, seedcotton prices ruled in Sindh around Rs 1800 and Rs 2350 and in Punjab at Rs 2000 and Rs 2600. Buying touched respectable level at 15,000 bales at Rs 4300 and Rs 5700. The authorities however, seems to shun any mechanism to keep individuals fight for ensuring gains.
On Thursday cotton prices turned higher as buyers showed interest during which about 21,000 bales were lifted at Rs 4300 and Rs 5750. Official spot rate was left at previous rate. Phutti in Sindh ruled at Rs 1800 and Rs 2200 while in Punjab they were quoted at Rs 2200 and Rs 2600. Again global trend was made pretext for improving local prices on.
On Friday rates moved modestly higher on the cotton market as spinners and mills continued buying on expectations of increase in foreign demand. The official spot rate was raised by Rs 100 to Rs 5,600. Prices of seedcotton in Sindh were higher at Rs 2100-2300 and in the Punjab at Rs 2300-2600. In ready dealings, about 17,000 bales of cotton changed hands at Rs 4,400-5800.
On Saturday most of the mills and spinners were on the sidelines amid expectations of fall in prices. The official spot rate was inert at Rs 5,600. Prices of seedcotton in Sindh were at Rs 2100-2300 and in the Punjab at Rs 2300-2600. In ready dealings about 10,000 bales of cotton changed hands at Rs 4,300-5775.
UZBEKISTAN CAN BE POTENTIAL MARKET, IN CASE
Those countries which could bear the cost of visiting Pakistan for choicest products, particularly that of textile garments and related products, the happy trigger exporters took it for granted Angolans and Nigerians too would come for marketing. That has thus far not been so, and Pakistanis have to look for Europeans and Americans to land here if their embassies have not advised them to stay back until further signal. The commercial section of Pak embassies in some countries took upon itself to keep Pak exporters informed about scope of exports.
This search for exports of Pak goods by the commercial section lacked genuine passion to deliver for the good of economy and country. However, despite commercial section in almost every country, some fertile brain surmised TDAP - Trade Development Authority of Pakistan. Thus involved additional manpower and cost of running the set up. The plan is follow up of PM's visit, which aroused enthusiasm to develop trade ties with this forlorn country. The TDAP seems to be eager for substantial exports of readymade garments, surgical and medical instruments, pharmaceuticals and leather products. It is hoped TDAP has keen eye on Karachi, Lahore and Faisalabad (indeed nearly inoperative for a month) and Sialkot.
If authorities could reach proper manufacturers and exporters no wonder huge textile and medical appliances catch eyes of Uzbek importers. The harvest when the participants return from Uzbekistan after March 7 to 12, 2012, size will speak for itself. A recent attendance at Frankfurt fair was reported in low profile.
GSP PLUS STATUS BY 2014 IS A CONSOLATION
Had EU package shown green signal by WTO, where same is lying for long stretch of time, would have been a more consoling news. Anyway, the comparative gain likely to be derived from the two, just in case, is disappointing. The package in the wake of devastating floods, in 2010 and 2011 would have served as applying oxygen to a nearly dying an. But those who were to give a push when WTO body waved for simple disappointment.
This country had no reservation in mind when entire EU put the package for just formal nod. The maiden voting proved too much for a hostile country, followed by other WTO members from the West.
If antagonism was based on ethics, on any business principle or the member with voting franchise knew not country favoured was hit by floods that had washed away roads, bridges, houses, almost ready for harvest crop particularly cotton. The EU was approached for help in view of the products ready for deliveries in countries, which had looked orders already.
However, the EU is on principle ever watchful to reach people in dire needs. The EU package was ripe for delivery with slight push of courtesy, but some business or ethical touch coming in between.
The EU, seemingly shocked at the failure to deliver the package, has planned to offer Pakistan, likewise other countries GSP plus status by 2014. Who has seen the future. Pakistanis can do one thing, hard work and shun looking to others for help rather strive to stand on its own feet.
PCGA FOR IMPLEMENTATION OF PM'S COMMITMENT
For couple of reasons the PCGA is very much in grip of cotton rate which has soared. Both local and foreign reasons are behind the rate rise. The desperate call over a week - back that TCP is inducted into buying to push rate high, effect was instant. Lately cotton futures globally too are hiking - from 98 cents to a dollar a pound. The experts are not absolutely firm but they see cotton futures to stay around $1 a pound. Locally soon after clarion call to introduce TCP to stabilise cotton rate, nearly Rs 200 was raised. But the TCP was basically busy with sugar and urea problem disabling it to enter cotton buying.
The PCGA in the meantime had met the Prime Minister who extended the call but until now TCP has not entered cotton market to procure cotton to stabilise prices. The TCP had responded to the PCGA call by expressing its inability to take up the job for around one month.
A fortnight has in the mean times lapsed. The TCP in the meantime seems to have been knocking the finance ministry's door for the requisite money should be around billion. However, thus far ginners are seen following the finance ministry, which is extraordinary cautious. The ginners have been approaching authorities on grounds that TCP entry will cover growers and ginners from loss. The sources now say enough time lapse has no pace for growers to gain.
CLCV MAJOR THREAT TO COTTON IN PAKISTAN
Nowhere on earth cotton yield per acre is as small as in Pakistan. Since cotton and textile sectors clamour before harvest every year for more but production goes down rather cotton made up the shortfall. Generally floods and La Nina effect cause loss of cotton production. Besides these two, CLCV and white flies dominate in causing production loss. The knowledgeable circles who keep an eye on causes of perpetual loss in cotton production lay fingers on one or the other diseases like CLCV, white flies, meat bug are main threat which in their words have ruled in Pakistan without apparently any efforts through research etc to arrest domination.
Often they have raised question whether any work is being conducted to keep cotton crop clear of attacks and forcing target down. Even Bt cotton that has worked well in China and India and elsewhere has not shown welcome result in this country. Bt cotton is pest resistant and high yielding elsewhere not in Pakistan. The authorities are hell-bent to get determined result from Bt cotton though every time experts declare some wrong with the seed, Bt seed costs pretty high and hesitant buyers go for cheap ones. Bt seed is available from America where original supplier cannot but sell desired seed.