The local situation belied ginners hope to gain from lower asking prices, but the same did not yield desired result as buying came down from even calculated 10,000 bales a day limit during the week ended on January 18, 2004.
China card has been supporting world prices while locally even exporters have deserted for long leaving entire field for the spinners to manipulate in the way they want, relevant sources said.
The official rate brought down in the beginning of the week failed to allure buyers and help push prices higher. However the cotton opened at Rs 3225 but closed Rs 25 down to Rs 3200.
WORLD SCENARIO: A number of factors influenced cotton prices in New York trading which provided little help in taking prices beyond range bound show. Slight edge upward was marked on hopes of China resuming imports.
Small speculative selling and buying and holiday on account of Martin Luther King affected the prices.
Day falls on Monday, next. USDA data showed firm trend, on the first day's trading speculative and options related buying kept market firm.
The monthly USDA supply/demand report was largely unchanged and within trade expectations, eliciting a muted reaction from the cotton trade.
On Tuesday futures finished marginally firmer on light speculative buying but prices traded generally sideways due to dearth of market moving news.
Small speculators were on both sides of the fence, either pushing the market down or engaging in some covering to nudge it near its highs.
Third session was mixed as nearby months came under pressure from modest speculative sales with market continuing to dawdle due to paucity of market moving news.
On Thursday futures finished firmer as buying by small speculators quickly wiped out losses from an early down turn. As for the USDA export sales , it showed net US upland cotton sales at 135,100 RBs (500 lbs bales) against belief it would range from 100,000 to 150,000 RBs.
Cotton shipments of previously booked orders picked up sharply as it hit 293,600 RBs, of course including total Chinese shipments at 200,700 RBs.
On Friday futures settled mixed in activity featuring small speculators as most players left early in front of a holiday on Monday.
LOCAL TRADING: The ginners statement showing likely production estimate is due in a couple of days. The pundits are restraining themselves committing outright whether it will show higher or lower, but it was generally believed estimate will be on the lower side.
Until then both the major players are observing restraint. However, the first day's trading was reported yielding 5000 bales, good by any account. Official rate was down at Rs 3225 without ST and upcountry expenses.
The fresh rates have continued to be held back same, to be published 24 hours late. The second day's trading yielded only one deal at Rs 2925. Official rate was at Rs 3225.
The deal finalised was from Sindh Sanghar. The price, in line with NY, was keeping low profile.
However 200 bales of Sanghar were sold at Rs 2925. Cotton pundits were expecting downturn in cotton prices.
On Wednesday spinners' pent up demands found expression in 10,000 bales lifted, mixed from Sindh and Punjab.
The price range was between Rs 3150 and Rs 3250. The burst of buying witnessed today was not taken for granted to be a normal feature.
The ginners statement on arrivals was keenly awaited. However, this showed that spinners were not averse to buying; they wanted stuff that would be welcomed abroad.
On Thursday trading dipped considerably but all quality lots were lifted in big bunches. Prices ranged between Rs 3050 and Rs 3250.
The official rate was pulled down by Rs 25 to Rs 3200. Ginners would not condone trading on Friday, around 5000 bales.
Decreasing official rate was a signal that ginners are ready to go further if spinners reciprocated by speeding purchases. However, much will depend on the ginners statement most likely on Monday.
SATURDAY'S: Quiet prevailed as dealers expected fortnightly ginners statement which is expected to determine a direction for the future trading. Spot rate was unchanged and nil deal was reported.
CHINA FEAR: Even the giants are manoeuvring how best China textile threat could be tackled which, according to house of representatives, is going to render millions of workers jobless.
China's production strategy enables it to throw out goods in any country at cheaper prices than those countries can produce.
The quotas inducted in 1990's are being gradually phased out and a year hence in 2005 January that system would end completely, setting problems for the poorer countries and the developed countries alike.
The countries like Canada, EU and America cannot compete price-wise with China because workers are highly paid. In developing countries like, Bangladesh and Pakistan higher taxes and higher utility charges particularly take away the competitive edge.
Since the cure is not in sight, or an easy one, China and US are at odds on this count and in the process of thrashing out a reasonably agreeable course to survive. Whether talks are reaching a solution is not clear. What however is well known in Pakistan is that China has offered Pakistan a way out to go along with China and humbling and beating world products beyond 2005.
What again is not clear in the minds of those in Pakistan, China is trying to convince how both countries combinedly penetrate the world markets without harming the interest of the two friendly countries.
Exactly one year is to pass by where-after globalised trade system will be effective. Whether this and subsidy issues will be settled, or leave the system in a mess yet to be dominated by the propounders of the world trade system and new world order, is left open to guess work. Had the weaker ever gained when two stalwarts fight?
WHERE'S THE MONEY: Cotton circles were pretty disturbed about production at 92 to 95 lakh bales. Thus they saw 25 lakh bales will have to be imported. They calculated an import bill for the total imports at Rs 43 billion.
Last year they argued country produced over one crore bales and still had to import 12 lakh bales.
So 25 lakh bales will be required to run the spinning and textile mills. They were additionally worried about overall economic scenario in the country.
Cotton and wheat were the commodities once being imported.. Today besides 25 lakh bales of cotton import of 12 lakh tonnes of wheat are being planned, which will cost Rs one billion, which is no problem, reserves being a record $12 billion, but how will it tackle coming issues.
However, they said the textile mills have the experience, capacity and stamina to make up.
They said the ginneries still have six lakh bales and may be 2 lakh bales in the field.
Pakistanis are importing 80,000 bales from India. Balochistan's quality cotton around two lakh bales will come to supplement the efforts.
The situation needs special care by authorities to take country out of the situation it is finding itself in. They pray and hope.
TAIL PIECE: The expanded scope after sinking billions of rupees in textile sector, circles are urging increase in cotton production upto 12 million bales.
They pointed out such fields and crops which consume comparatively more water should be used to produce cotton.
They pointed out sometime back such an arrangement was put in practice. They hoped the practice should be enlarged to ensure cotton for the mills which have invested huge amounts. Billions of rupees for imports of cotton should be saved.
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