Lint prices were easier and adopted a barely steady posture on Thursday with turnover volume having also decreased, even though New York cotton futures were ruling firmly. The Cotton Crop Assessment Committee in Islamabad said this week that Pakistan would produce 13.3 million bales (170 Kgs) this season (August 2012 - July 2013) against private assessment that 13 to 13.5 million bales would be the output with each bale weighing about 155 Kgs as per the brokers.
According to the Pakistan Cotton Ginner's Association (PCGA), total amount of seedcotton (Kapas / Phutti) received till the 1st of December, 2012 were 9,582,560 lint equivalent bales of domestic size, or a shortage of 0.70 percent compared to the same period during the previous season (2011 - 2012). From this quantity, domestic mills are said to have lifted 7,650,373 bales, the exporters picked up 159,740 bales, while the total unsold stock lying with the ginners was 1,772,447 bales in both pressed and loose form.
It is generally believed that Pakistan will produce between 13 and 14 million domestic size bales during the current season (August 2012 - July 2013), while the domestic mills consumption will range from 15 to 16 million bales. Exporters many pick up from 0.25 to 0.5 million bales, while the domestic mills may need to import anywhere from 1.5 to 2.5 million bales.
Some slowdown has been reported in Chinese yarn enquiries, possibly due to the ending of the Calendar year 2012 being close and the beginning of the new year viz. 2013, but overall demand for yarn remains basically very firm. Global yarn demand is also said to be on the tighter side.
Cotton import bookings keep increasing steadily and may have reached 175,000 tons for the 2013 / 2014 season as reckoned today by the trade. Imported styles include American, Brazilian, Indian, Greek, Nigerian lint while some CIS cotton is also trickling in by the land route.
In domestic cotton there are complaints of quality problems, particularly in Sindh. Some Sindh ginners are reporting losses in their operations and a few of them are also said to be closing their units. However, more Indian cotton may be imported to plug the deficit.
Seedcotton prices were also generally subdued and were ruling from Rs 2,400 to Rs 2,650 per 40 Kgs in Sindh, while in the Punjab they were said to have extended from Rs 2,500 to Rs 2,750 per 40 kilogrammes.
Lint prices were also said to be under pressure and extended from Rs 5,300 to Rs 6,000 per maund (37.32 Kgs) in Sindh, while in the Punjab they reportedly ranged from Rs 5,800 to Rs 6,000 per maund, as per quality. Till the evening, sales of 1,000 bales of cotton from Sanghar in Sindh was reported at Rs 5,500 / Rs 5,600 per maund (37.32 Kgs), while in the Punjab 600 bales from Khanewal and 1,200 bales from Rahimyar Khan were said to have been sold at Rs 5,950 per maund each.
On the global economic and financial front, fears continued to be expressed that mostly the economic condition was steadily but surely moving downhill. The Eurozone leaders did find a modus operandi to push forward Greece's liabilities by a couple of years, but the underlying causes of managing a well balanced economy have not been duly tackled. Only the day of reckoning has been postponed. The same story is more or less prevalent in many of the Eurozone countries.
Eurozone's joblessness remains record high causing social misery over much of the length and breadth of the zone. About 11.2 percent or about 18.5 million people are said to be unemployed in the Eurozone. Now we hear that Cypress needs a bailout. France's finances remain shaky as its leading banks have doled out billions of dollars to the peripheral economies of southern Europe whose recovery remains dicey. Indian growth remains at a three year low level. Its government is mired in political conflict and monumental corruption.
In the United Kingdom, Finance Minister George Osborne is reported to have said in London recently that at least another year of austerity measures will have to be faced by the Britains. He also added that in fact spending cuts and tax hikes are likely to be extended till 2018, which is indeed a bleak pronouncement.
Early this week there were news of surprise contraction in the US factory activity which mitigated against any optimism about the health of the global economy. Last week the global shares markets were jittery upon reports being received regarding the unsound condition of the global economy.
Another sector of concern has been the news about the basic role of banking in the global context. A key line of thinking relates to separating the functions of the banks as simple safekeepers of depositor's money and then invest it in the economy to increase production, sales and services and cut it off from the "shadow Banking" which involves loaning to non-banking middlemen who in turn invest the money in risky and speculative ventures in equity, commodity and other markets but have no intrinsic or inherent interest in bona fide economic activity. Thus tighter controls are being suggested both in Brussels and Washington to control shadow banking.
However, the topic of the hour which has attracted global attention is the imminent arrival of the "fiscal cliff" in the United States when automatic tax increases will be effective and government spending will be curtailed unless the Congress agrees to a jointly acceptable formula by both the incumbent Democrats and the Republicans in America to find and agree upon a workable solution to tackle the issue.
By midweek, global equity markets had perked up and were hoping that the US Congress will find a workable solution to avoid falling down from the "fiscal cliff" approaching at the end of this year. Investors now were mostly watching the developments in the US Congress regarding the fiscal cliff negotiations and are cautiously hopeful for its successful outcome.
Mega investor Warren Buffet has reportedly said the even if we miss deadline of December 31, 2012, the United States Congress is likely to find a solution and agreement to the "fiscal cliff" sooner than later. Presently the popular polls in America suggest that president Obama will succeed in finding a compromise in the US Congress to find a viable solution to the "fiscal cliff" hurdle and get the economy to move on. However, we may have to wait till the end of this month before a deal is struck.
Comments
Comments are closed.