The ginners willy-nilly bowed to the dictates of international frequent and sharp retreats, though their wait did not end for a quicker outlet during the week ended on July 3, 2004.
The spot rate toed the line left by international rates and was reduced by Rs 125 to Rs 2900 without upcountry expenses.
WORLD SCENARIO: Unlike previous week, when futures had ended mixed, last week faced sharp setback in New York cotton futures.
The July contract shed 1.40 cents to 47.25, and October lost 2.73 cents to 49.47 cents a pound.
On the first trading session, futures slumped to a soft finish on speculative fund sales and the reports that there were ample rains over wide areas of US cotton belt over the weekend. Analysts were looking for USDA planting report.
On Tuesday, futures turned firmer on buying by the trade and small spec as the trade braced for release of a key government report which the players considered that above 14 million would likely be viewed as bearish, while acreage under 13.5 million as friendly.
The cotton futures tumbled on speculative sales with the annual USDA plantings report weighing somewhat on the market.
The USDA estimated plantings will reach 13.947 million acres. The numbers are bearish, they said, and sharp reversal was marked on Thursday as futures tumbled from trade and commencing sales to close weakly in volatile dealings with more see-saw business expected on Friday.
The cotton market will remain shut on Monday for US Independence Day festivities.
The cotton futures continued weak on Friday.
LOCAL SCENARIO: Low profile trading continued throughout the week without yielding except that ginners bowed to the conditions adverse to them and spinners comfortably looking for more and yet more favourable moments.
The prices started from day one and in the process spot rate went down from Rs 3025 to Rs 2900 until Friday.
In ready, low quality lint changed hands at Rs 2700/2800 while new crop, yet to be delivered, was quoted around Rs 2800 without Rs 50 upcountry expenses.
However, no deal was reported on Monday, pressing the sellers to opt for cutting prices. A couple of deals were carried by the DMR, struck obviously on Saturday. The spot rate was brought down by Rs 25 to Rs 3000.
The second day's trading also moved in the same direction while one deal of previous day was given. The rate, as could be judged from the trend in trading, was further cut by Rs 25 to Rs 2975. The spinners expected good day and tracked what move cotton futures were on in New York.
On Wednesday spot rate was reduced by Rs 50 to Rs 2925 without Rs 50 upcountry expenses. Only one deal was reported at Rs 2700 per maund.
On Thursday, spinners started enquiries and sources reported a couple of fresh deals mainly from Sindh which were at lower prices because of quality.
However, New York trading was more of a thing attractive to trace its movement. Ginners were additionally disappointed to see moves adverse to their interests leading to slashing prices.
The day witnessed one mills selling to another mill--of course, in old crop. Another deal of 100 bales of Burewala --in new crop--was done at Rs 2825.
Sellers reduced another Rs 25 to attract buyers which attracted only two deals.
SATURDAY: Only one deal was reported on the cotton market. It was in 2000 bales of Bahawalpur at Rs 2700. Spot rate was unchanged at Rs 2900 without Rs 50 upcountry expenses.
OVER-INVOICING: If any crime is committed it should thoroughly be probed, charged and the man or group or association should be duly penalised. But the demand of this critical time is that products meant for export for certain destinations should never be held back.
This is what the victims have claimed but authorities have not subscribed to it. As the chairman of Bedwear Association has said, shipment of export products should not be detained on the charge of over-invoicing.
The PBEA chairman said that exporters of bed-linen have to pay 'under the table' to request customs staff to let the shipment go.
This government is claiming that corruption from the top has been completely eliminated, but sources while accepting the claim ask whether that is enough.
As the above citation of PBEA chairman is self-explanatory, understandably MBP is the right place for checking the wrong. But the chairman's walkout from the place is obvious. Shabbir explains that withholding of the export products from shipment to European Union is strange under pretext of over-invoicing.
He further elaborated that over-invoicing in case of EU is self-defeating. He says where there is no or little tariff such as in Gulf and ME states under-invoicing is possible.
The real issue could well be in anyone's hand who could weigh and find out whether to risk country's interest over one's own.
What people like under such circumstances to keep up name of the country rather than risking its gain. Now both exporters and authorities have open field to do the right.
'ST HATAO' Once loudly pronounced 'Gharibi Hatao' call has not been met with anywhere close to its parameters. Now interested quarters have been hoping that sales tax (ST) on cottonseed/oil on the lines of ST on ginned cotton would be removed.
The victims have called for evading the threat to the very survival of the crushing units. If it happens it would deprive over 150,000 families linked with the industry catering to the needs of ghee makers.
The cotton ginners have called imposition of ST a terrific mistake leading to difficulty in collection of ST.
The 2004-05 budget has taken back ST on ginned cotton, obviously for two main reasons that exporters of cotton and products had been presenting as great obstacles in smooth exports.
Whenever question of edge arises, exporters shudder to mention the names of China and India which play hell with Pak products. But knowledgeable circles take such a claim just the half way.
China and India have excelled Pakistan in some other ways which add to their export products with clear margin.
They have been by now well set in manufacturing textile machinery and are almost self-sufficient in a wide variety of dyes and chemicals while Pakistan depends on imports.
However, time has come to become self-sufficient in all respects to compete challengers rather than depend on govt for everything to be able to export and combine to achieve one target after another.
TAIL PIECE: A report has praised 98000 bales of cotton produced on 39000 hectare land. The govt together with Khuzdar farmers has achieved 97 percent of 40162 hectares during 2003-04.
The cotton has been perhaps grown in basically rice growing areas. However, this could be hardly so much praiseworthy if three ginning units as stated in the report were not set up.
And no less a matter needs loud mention is free distribution of seed and pesticides etc. The fact that the land here is capable of giving an yield contamination-free lint.
This reference to growth is because nature has been bountiful. Let the nature and growers continue labour to grow more finer cotton in Balochistan!
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