Rising pressure on cotton prices

On Thursday cotton prices both local and foreign origin witnessed a decline as prices slid along with several other markets. Reports from China, India and America all indicated a pressure on cotton prices so that domestic prices also conceded a further fall in lint prices upto a reported Rs 100 per maund (37.32 Kgs) in the ready market.
Thus on Thursday the seed cotton (Kapas/Phutti) prices in Sindh were said to have extended from Rs 3700 to Rs 3800 per 40 Kgs, while in the Punjab the seed cotton prices are reported to have ranged from Rs 3500 to Rs 3800 per 40 kilogrammes.
Lint prices from Sindh are said to have ranged lower from Rs 7900 to Rs 8250 per maund (37.32 Kgs), while in the Punjab they reportedly ranged from Rs 8100 to Rs 8250 per maund, according to the quality. Current cotton crop (August 2018/July 2019) is projected to produce between 11.5 to 12 million bales (155 Kgs) on an ex-gin basis. Some improvement in the working of the domestic textile industry is being reported following some positive fiscal measures announced recently by the government.
Earlier reports indicated that if the improvement in the textile sector continues, Pakistan would needful import some 4 million bales of cotton during the current season to meet the deficit. Ready cotton sales from Sindh reported till Thursday evening comprised of 200 bales from Sanghar at Rs 7900 per maund (37.32 Kgs), 600 bales from Kotri at Rs 7950 per maund and 1000 bales from Tando Adam at Rs 7950 to Rs 8000 per maund,
In the Punjab, 200 bales of cotton from Burewalla sold at Rs 8000 per maund (37.32 Kgs), 200 bales from Chistian sold at Rs 8075 per maund, and then 200 bales each from Faizlpur and Rahimyar Khan and 400 bales from Dera Ghazi Khan all sold at Rs 8200 per maund.
On the global economic front, most news is centred on the increasing tariffs President Donald Trump continues to impose on Chinese imports into America. Continuing tussle of imposing trade tariffs by America and China against each other remains unabated, much to the worry and dislike of most other countries around the world.
In this regard, the European Central Bank (ECB) researchers have minced no words to declare that, if the tariff war continued between America and China on a wider front, the economic activity in America could decrease more than two percent within a year.
Economic officials have warned that it is not only America which would suffer in this type of trade war, but Chinese economy may also be dislocated.
The Americans would both much more in the ongoing trade war. It is believed that China could minimize its losses in the continuing trade war with America as it could more successfully adopt alternate avenues with other continues while America would face larger difficulties in minimizing its tariff war with China.
With protectionism widening its scope and practice around the world as incorporated in the "America First" policy of President Donald Trump, the threat of a significant slowdown will not be limited to America and China but will certainly widen to encompass most other countries around the world.
Thus both the President of the European Central Bank (ECB) Mario Draghi and the chief of the World Trade Organisation (WTO) Roberto Azevedo have clearly warned that the growing policy of American protectionism as being propagated and pushed by President Donald Trump is clear and real danger to the global economy.
Furthermore, the United States National Trade, Investment and Development Agency (UNCTAD) chief Mukhisa Kituyi has been reported by AFP from Geneva as having said that "behind these threats to global stability is a wider failure, since 2008, to address the inequalities and imbalances of our hyperglobalised world". He termed the ongoing Sino-American spiralling trade fights as being symptomatic of "a degraded economic system" and also the highly deficient shadow - banking system which has swollen to Dollars 160 trillion which amount is twice the size of the global economy.
Added to the Sino-American trade wars, the nuclear problems of Iran, the Brexit dilemma, the pile of loans payable by Italy, turmoil in Turkey and the fear of radicalization and rightism in Europe have clearly created climate of fear around the world.