Spinners lift lint in big lots

Being no respite in seed cotton arrivals, authorities on insistence of ginners inducted TCP and lured exporters that supported falling prices which whipped spinners to come to terms and lift lint in big lots without much hesitations.
The investments have been recorded during last couple of years in view of the WTO system that will open door for quality products and competitive prices. The Box III cotton price was raised twice to cumulative rise of Rs 50 to Rs 1975 until Friday.
WORLD SCENARIO: The cotton futures appeared on the recovery path though mildly as merchant and speculative buying poured in. The futures opened at 46.42 and 46.74 and closed at 47.99 and 47.05 cents a pound.
The first session saw cotton futures gaining slightly on fund and short covering but an absence of news saw cotton pinned in a tight band in the days ahead. The traders said the price action in cotton is better than the (situation) would warrant.
However, players were waiting for the US cotton harvest to hit full bore. The cotton players would turn their attention to the weekly crop progress would turn their attention to the weekly crop progress report of the USDA when market would reopen on Monday.
On Tuesday to futures repeated score on merchant buying due to tight supplies ahead of the harvest in US. Talk was swirling in the trade about why the spot December was up so sharply. The market would now watch for the weekly USDA export sales report shortly. Even though we have a record (cotton) crop, many growers were not yet letting go to the merchants were running into tight supplies.
They are bumping up December to encourage the growers to sell, sources said. On Wednesday futures settled higher again but a steady fusillade of trade sales sharply reduced the markets gains analysts observed. Traders observed futures rode to higher ground in the early going but trade accounts prevented the market from staging any further advance.
The analysts however, reminded that market must contend with large supplies but a supply crunch in the short term should help buoy values in the coming days. On Thursday futures took a negative turn on combined trade and speculative sales, although the market just probed the lower end of its trading band and is expected to day in a range. Aside from the large crop world- wide dealers said the market will likely weaken in the next few sessions due to the onset of the harvest in the United States.
The last trading day was noted mixed with solid trade buying paring losses in fibre contract following a down turn prompted by speculative sales in the market. However fundamentally cotton market players would still need to contend with the record crops in the world.
LOCAL TRADING: Now there were three buyers of lint and hence heart burning is not seen or cannot be felt. The faster seed-cotton arrivals have not been affecting much the cotton prices.
The crop projection is being placed at 12 million bales and even above. But a change in spinners and mills attitude is apparent - they much less calculative then they used to be when they were the only buyers.
However, the official spot rate continued firm manifesting supply - demand had not much big gap. It was at Rs 1925 and asking prices were between Rs 1850 and Rs 2000. The day on trading was firm and prices stable.
The TCP was buying amid accusation while exporters were present on the back of authorities green signal. Exporters can book up to 500,000 bales to mainly Bangladesh and Indonesia.
There was nothing speculative on the second day. Spot rate and rate in ready depicted unchanged colour. On the third day spinners behaviour turned very clear and reconciled in view of the WTO system requiring more sales from Pakistan.
The spinners have in whisper assured ginners they will not upset then by another two million bales.
God's grace TCP and exporters presence will keep spinners on the defensive or assured of required quantity without doubt. On Thursday upturn in cotton price appeared almost must.
The cotton futures in New York were gaining and signalling sellers in Pakistan to follow suit. Ginners held their breath and pulled spot rate by Rs 25 to Rs 1950. In ready also asking prices were higher by similar amounts.
The session on Friday was firmer as ginners raised spot rate by Rs 25 for second day in a row to Rs 1975. Hoping to get better price ginners put cotton stocks on offer ranging price being Rs 1900 to Rs 2000.
Punjab cotton was sold at higher rate. Ginners tightened their belt when cotton futures started showing weakness. However, authorities appear quite aggressive not to let growers suffer.
The Pakistani textile exporters have implicitly accepted that they have made blunder in remaining indifferent to industries manufacturing stuffs useful in processing of export products. But the knowledgeable circles called it a deliberate neglect by the authorities and sort of criminal lax on the part of exporters for reasons purely personal.
They pointed out past areas have most buildings strong foundation than Pakistan could make in half a century.
The Taiwanese and Korean suppliers of chemicals took decades to oblige Pak clients to teach a lesson by holding back October shipments of chemicals on grounds of 11 percent rise after finalisation of deals. The stalemate if continued will mean huge lose to the exchequer.
The hitch on the part of the suppliers was that honouring the original contract would have meant huge loss which they were not prepared to shoulder.
The receivers would boil down to realise what ugly thing is dependence on others. Fortunately this nation fought was more than once, but unfortunately won non because of the "dependence" for nuts and bolts on suppliers, who were not people from ourselves.
Today the foreign chemicals suppliers have shaken rather rudely poor exporters who see no other alternative than to plead to arrange local production of chemicals used in the textile processing so that country no longer remained dependent on foreign suppliers.
The TMA vice-chairman went so far as to urge the Ministry of Industries and Production to meet the local manufacturers of caustic soda to double the need of the local textile processing industry.
If the leaders would tarry and look around find Pakistan has two morsels to survive and definitely not to live a life that is enjoyed by people beyond us.
BY COTTON: Cotton and cotton products have without asking much from the govt or those who made money and name is being seen as a stuff to be replaced by richer stuffs to flood exchequer with foreign exchange.
Today, when such a perception is being developed about cotton is top scorer of foreign exchange earning despite its worth is ravished by nature and men. The replacement is not easy to find as apparently alternative has never been named. Among crops cotton is humble and easily encashable without much irrigation water, which is "Tabarruk" offered in trickles to most moody.
The reason is fickle some disease devastates cotton crop like CLCV changed for tastes sake Burewala strain. Since these are dreaded research and developing cure is dreaded for investment is huge and experts are non-existent or their service needs more than what Pak govt can pay.
Anyway right now the attack could be tamed as experts have advised merely caution and use of more water (availability) and agro chemical to effectively check before damage is done on 1993 level.
The sources however, reminded that when in 1991 record 12.6 million bales were produced, farmers were made to bleed for selling a cotton bales. Threats had come they will switch over to other crops.
The way water problem aggravates when crop need it crops can't be replaced. Because that sugar remain hostage to couple of factors, rice is playing good role as if feeds people and all.
Sport goods surgical instruments can't reach cotton level in foreign exchange earning. The best alternative would be consult farmers who shed their blood and taken their version serenely.
The cotton growers would oppose. But as some Sindh farmers expressed they fight to keep watch on international will prices going in our way.
TAIL PIECE: Ginners were criticised for not paying fixed price - Rs 1925 per 40 kg Sindh growers protested the fact they were being neglected while ginners are selling to TCP at higher rate. The protesters instead on govt fixed price or they will continue to agitate.