Cotton prices showed slightly uppish trend on back of spinners regular buying interest against world trend which looked for a direction and closed with divergent trend, said relevant sources.
WORLD SCENARIO: The cotton futures closed mixed as market waited for various date to pick up a direction, and closed depicting divergent trend. The futures on the first day opened mixed in subdued trade with the market waiting for several government reports to provide direction. A long holiday in China, kept several players on the sidelines.
On Tuesday futures closed mixed in narrow ranged trade as market kept news that heavy rains may sweep into Texas, the top cotton growing area is the US. Fundamentally market must contend with large crops in the US and China. Higher depiction of cotton futures was shown on speculative and options-related buying, with rains in the key growing areas buoying bullish sentiment in fibre. Weather channel said that abundant moisture from Gulf of Mexico will unload heavy showers in Texas.
The prospect has provided bullish sentiment for cotton buying has not run into any level of sales until December surged past 48 cents. While rain played its role, the govt reports were still reported on Wednesday. On Thursday futures justified fundamentals on sales by small speculators continue and the market continued to trade in a band. Futures got buoyed lately on reports of heavy showers drenched Texas.
The futures finished mixed in trade featuring small speculators, with most players sidelined to wait for release of the govt reports next week. Analysts said a recent rash storms in the southeasters United States will likely prompt the USDA to trim its estimate for US cotton output in 2004-05 to around 20.31 million (480 lbs) bales.
LOCAL TRADING: Certain section expressed satisfaction the TCP entry had stabilised prices in obvious contradiction of cotton futures in New York. However opening day in cotton trading saw spot rate raised by Rs 50 to Rs 1950 without upcountry expenses of Rs 50.
The ginners had opted for taking advantage of the rains and spinners trying their muscle to show strength. Their strength is to stop or delay buying. Actually spinners harbour bumper cotton crop perception and they reject any setback after September had passed without sparking any apprehension. Cotton prices were firm on Tuesday as spot rate resisted budge while in ready rate continued down Rs 150 to Rs 100. In the meantime release of ginners arrival report made both ginners and spinners cautious. But reported said that rains had caused interruption in supply of seed cotton. Against earlier report and manifestation of spinners stand the clear fugitive boosted seed cotton supply. Some 3000 bales of cotton were sold, 5000 bales sold at a range of Rs 1900 and Rs 1925.
The buying came despite sellers/buyers remained glued to radio and TV sets enjoying Pak success. On Thursday spot rate was pulled down sharply by Rs 100 to Rs 1850. In ready cotton was lifted in a range of Rs 170 and Rs 1950. On Friday prices resisted any budge and firmed at Rs 1850. The rise and drop which appeared more a whimsical move, need was again felt TCP entry to set things right.
However, exporters entry into the market will supplement the job of the TCP but exporters are all business minded who will not act exactly in line with the TCP. Anyway the spectacle needs to be watched before commenting topsy-turvy. Irri white gained Rs 50 to Rs 1000 and Rs 1050. Makai followed suit and rose by 25 to Rs 800 and 850.
TEXIM IN DOUBT: It will be hard to wrap up the newly announced and half a century awaited textile ministry reflecting in a story from Karachi. In Bangladesh and Sri Lanka textile ministries are working and both enjoy healthy going. The once Eastern wing of Pakistan and now BD without raw material and other accessories has been matching Pakistan if not excelled.
Such spectacular success could be attributed functioning without interference of other ministries The usual sources expressed that they expect the commence ministry spell to hold textile minister a hostage will not be possible under this regime.
The commerce ministry monopoly will have to go if the PM and President want to export earnings equal to, if not beating the import bill.
According to a contemporary print media report on Sunday, (October 3) while other ministries were lightening up belts and making hectic preparations to start operation textile ministry is upset and without plan about a ministry building of its own.
Mushtaq Cheema's hope to lift textile industry of Pakistan to the size of S. Korea, Singapore, Thailand is shaking. History is a witness that every entrant thinks high but ends up in building his own "empire."
The sources said struggle of bed-wear, garment and towell manufacturers leaders have lead textile industry where it is.
These leaders have fought in vain to show what value addition to one pound of cotton means, or why export earning, major share of which comes from cotton and textile exports, was till 2003-2004 stuck up around $8 million.
However, textile ministry palatial building may be in doubt but textile minister has come to stay, a report datelined Lahore is indicative beyond doubt.
TCP STEPS IN: The TCP had to and has entered buying arena to buy lint from ginners and help thus the growers. The hue and cry raise for a rise in what govt had fixed died down. The last bough cotton on October 2, 2004, amounted to 50,600 bales, lint grade box III. The spinners had long stopped 2003-04 lint as they could buy newly harvest cotton.
The feeling that some body else that spinners enter and lighten the ginners burden. Ginners must thank God. The report in this connection has not been clear whether bought up but was of 2004-04 season? The TCP has hunted it will continue buying from Sindh and Punjab ginneries. The lint bought was fixed price at Rs 2314 40 kg. Or Rs 2159 per 37.32 kg.
The scenario has slightly changed after huge rains that are expected to have damage quality. The ginenrs have already expressed low price fixation. So far well and good. But the bumper crop in Pakistan, America, China and India show that a certain set back here and there won't make much difference in prices. Instead of wasting time energy and national press spaces, probe should be held why ginners left with huge stocks at the close of season: for their own fault or spinners. Why spinners drain out money for buying over 2 million cotton bales that produce yarn. It would be a great service 2003-04 year will be remembered for settle.
This issue once for all. How much, if probe successfully held and would traced, will save dear readers.
TAIL PIECE: The cotton prices resisted free-fall on the TCP intervention to support farmers. Last weeks, the government held meetings with the Trading Corporation of Pakistan (TCP) and asked them to continue intervention in the market to bring out growers from the prevailing chaos.
The government urged the TCP to buy cotton from the market, the move expectedly help in stabilising the cotton prices in the coming days. In the meantime, the government has fixed support prices for Phutti (seed cotton) at Rs 925 per 40 and Rs 2159 per 40 kg for grade three cotton lint.
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