Rains and TCP tender played vital role in cotton trading as routine business was handicapped considerably through the week ended on August 5, 2006. Spot rate opened at Rs 2500 and remained unchanged tll the end of the week.
WORLD SCENARIO
The Texas and South of the US cotton belt's dry spell has been considered as a factor that would lift lint prices high. Besides this, the ICAC prediction that demand for cotton will remain on the higher side. But the opening day speculative sales and profit taking dipped the contracts.
On the opening day near ones October was down 0.25 cent to 53.45 and December down 0.26 to 55.28 cents a pound. The Texas factor prompted speculative buying leading to push contracts to six week high. Market source nearly made responsible speculators for making often decision that is incomprehensible to other major players.
Those keeping a keen eye on the weather problem and reason for convincing ups and downs held drought in the southern cotton belts for speculators to go active. What, however, is most rewarding in a sense that if supply line showed on the higher side prices will push higher but its hand out likely in the second week of August proved little strengthening. The wait gave way by trade sales and mild profit taking resultantly contracts depressed.
The weekly export sales are also awaited which experts predict would not offer much to the cotton trading on NYCE. The players pointed out that all factors may or may not affect the trading and price but the positive signal from the weekly export sales.
The market has been vexed at the persisting oil prices and unending dry spell in highly productive cotton bells. It was expected now the crop production will come down to around 19 billion bales against last 2005-06 more or less 23 billion bales. Slight improvement weekly export sales as reported also had positive push.
The majority of exports have now come with low production. However the latest is that 2006-07 output will go up 205.mm bales, slightly higher than earlier predicted. The Friday day's business was down October 0.75 to 54.48 and December 0.87 down 56.28 and a pound.
LOCAL TRADING The bazaars looked deserted throughout the week and cotton market was no exception . Some brokers looking like had been there to see how rains can be enjoyable besides, it gave a qualified support to wait for TCP lender to be floated in day or two.
The spot rate was unchanged on the opening day. And the way monsoon rain were persisting it became clear only very needy cotton consumers will visit market to lift and transport at some what higher transportation charge. The rate ruled between Rs 2470/2500.
On Monday business started with few people in the market. In fact not all brokers had decided to go to business hoping buyers would be feeling likewise. The supporting factor was also the tender floated by the TCP for 34,000 or 36000 bales. The TV news also encouraged people to take a day off. Spot rate remained unchanged at Rs 2500.
No business transaction was witnessed on Tuesday despite no difference in weather and street condition, a few bales of cotton changed hands in close proximity of spot rate that is Rs 2470 and Rs 2500. The millers were watching the date for opening of tender. Their perception is that TCP cotton quality is some what preferable. The market is offering generally cotton from Sindh stations.
On Wednesday some buying was reported ahead of opening of the tender. The millers have been apparently encouraged ad lifting quality cotton be it from market or TCP. Spot was noting to get changed which stayed at Rs 2500. Meanwhile, ICAC has predicted that production won't keep pace with the consumption.
This signals cotton prices will remain firm. Much awaited award on tender was not made public and consumers stayed on the sidelines. The market gossip was in low voice about quality of cotton due to heavy down pour.
This had prompted growers to clarify the crop position which according to them would be normally good. The TCP is sorting out the award who to offer and prices.
On Friday 12000 bales were sold by TCP to the millers who had asked for 26000 bales against 36000 bales offered. The better type was accepted at Rs 2381 and low quality but at Rs 2340. The truck owners have increased carrying charged due to rains restraining normal business activity. The spot rate was at Rs 2500 unchanged. On Saturday situation remained unchanged and Nodeal was reported from any station.
DOHA ROUND FREEZE The Pakistan stand on Doha Round Freeze is not unclear but is principled silence as the third world authorised spokesmen are Brazil and India, who are supposed to react in whatever way they like. Now, orphaned Doha Round has been given a sort of respectable burial, one of the 149 WTO members who maintained principled silence all along, hardly required to poke nose, lament or Pascal Lamy way express optimism that someday some ingredients would be found out to inject a new life.
All what had happened in the five years or earlier was signalling the WTO was on way to burial and those who were behind were for good or bad can still give enough oxygen.
And Pakistan is not in that lofty position so voicing either way is more unwise than to open lips and let its voice sunken in vacuum. Since WTO hoax poor countries are hearing loud that the poor countries (The Poor People) will be benefited with billion of dollars.
Naturally the so called globalisation of trade would have vomited such bid is among the big ones, super power (US) and emerging power like India and Brazil. Pakistan, despite being a country gifted by God has been placed in no position. Bangladesh has been awarded the LDC's status. Why those in a position to award places have been so miserly.
The knowledgeable circles expressed, so, but together with this, expressed truth is what is hardly digested or taken in right earnest. Circles said keeping silence on such huge issues like tacit burial of Doha Roand is wise, last comment started taking unimaginable stretch of unending argument and counter argument.
The world like Lamy has been pained on what happened in Geneva in presence of those who talk big but act less. The truth is that Pakistan ha not gained power to be visibly felt. And for this Pakistanis attending every meeting away from country like Geneva and Bangkok is just like draining out hard earned foreign exchange in billion on 5-star hotels, sumptuous food and supersonic planes, this sources said say they do not but the roads, power supplies and unemployment say.
LET IT WORK AS DESIRED The permission has been granted for restructuring of Pakistan Central Cotton Committee (PCCC) with the idea to lace it with power looking like autonomous. Thus authorities assured themselves making decades old cotton related organisation independents. Expected to turn efficient, viable and worthy to deliver, the same has been reduced from 33 to just 15 member staff.
The basic idea behind the change is that it has been taken for granted that PCCC will increase annual production of cotton from present 10 million bales to 20 million bales.
The PM, who was in the chair once again as ever, remained committed to the noble objective of making small farmers more prosperous than they have been so far, to meet obligations of his daughters marriage, school going children and health matters, the most of such bodies with little power or independence have lined with cotton and related works like bettering of output, quality and supplies.
The PCCC is also one of the many such organisations expected to promotes institute like the one in Multan and Karachi. But looking retrospectively they are perennially short of funds. Thus work on viral diseased or sudden outburst effect has always been done but have never found as desired ,said knowledgeable circles to stay anonymous. Since PCCC is being empowered and being made independent they were asked whether the committee had some remarkable work, answer was that efforts to raise cotton production has been very slow.
They pointed out that growers and ginners are assured of all cotton purchase and they ensure production of requisite cotton needs. They said the contamination free cotton production remained nil till today because despite it being international need, was not patronised.
Similarly investment hungry country was full of cheap labour but had not one skilled worker worth the name. They said by making big organisation won't solved the problem but authorities will have to take effective steps to implement what they have in mind. Or plans, and organisation have bedecked this country but prosperity is still being sought!
CEASEFIRE, PLEASE The WTO chief had throughout been considerate. Associated with trade matters of his country knew the problem when a person or nation takes upon himself /themselves to rectify the lingering wrong for years not only give and take is to yield a solution but yon have to part with one side of the butters if you have missed.
Quite naturally when Pascal Lamy was crowned with thorny blend he always warned the lousy thinking over globalisation of trade for prime reason to ensure the poor get what they are deprived of by some-say two square meals or a hearty laugh. But at the end of his statement would find no such thing. WTO was meant for after last week's, on July 24, 2006, disappointing talks in Geneva, he willy nilly declared WTO talks be without ceremony suspended.
But hasten to add that he expected that some positive ingredients could be fond out from thick jungle of contrasting interest. One strange idea comes to mind: had WTO been Lamy's sort of property then? Most likely he would have found out some solution may be he would have parted with the other side butter. But WTO is not his property and his own country and Germany reminded him that the Union had parted enough and it was US turn to make deeper cuts than 60 pc cut in its agri subsidies.
But as WTO is not Lamy's property, it is also not Bush's (US) property. Besides voters and legislatures can back out and Republican would say good buy to November election. The hitch does not end here: but you guess where that may be somewhere beyond when Bush Administration will lose power.
TEX BODY'S NAME A MISNOMER Who got the package (Textile) as all textile bodies have none by one surfaced to ventilate, apprehending their products without help would be uncompetitive. The authorities who first ignored the call and then halved the size to Rs 25 billion, must have regretted doing this and feared it goes waste. In fact authorities should learn a lot where the R&D money and men manning the department are utilised.
If the authorities were in dark who actually are behind the scene asking for tex package and which sector they particularly belonged. Almost all concerned with value added sector are out in the post package era to lament for being ignored. It was authorities six sense that held them to spare half of the total demand, and most likely they must have been sure they were not going to repeat the wrong any more, for a couple of years the knowledgeable circles sources said they were not exactly why once in lifetime exaggerated investment claim was hyped up.
The investment the circles pointed out, came as govt pressed SBP to share some of their profit in the wake of rise in mark up with textile sectors now faced with WTO to match the well equipped India and China. Thus there came their way to make their voice heard by marking at louder, an old practice.
The circles said they have met the people shy of being seen and heard who confided that the part of package allegedly would bank interest, and part will be used to make the products competitive with people with more wherewithal.
A letter by head on plunged in the textile sector recently revealed that billion, rather tens of billions of rupees worth of sales tax, duty drawback was siphoned off by made in fashion textile exporters in allegedly connivance with the junior staff of the respective departments.
In the process leading textile exporters with hard earned invested money came out complaining they are bound to lose edge unless something is done to pull them out of rut.
TAIL PIECE: According to authorities the long-term machinery finance and locally manufactured machine finance schemes remained under utilised. The attentions to these schemes are negligible so that the central bank has asked banks to suggest whether schemes should be abandoned. How long since such deplorable attitude of users towards the machinery is being experienced is unclear. The oil phenomenon is very recent.
The answer is required how long machinery import is being avoided despite deficit remain double. This HEARS consoling that deficit is within the reach due to $13 billion reserves, better remittances from expats, privatisation proceeds, but expect few, nation again imports of such things in whose name development, more jobs and more exports are claimed.
About long term scheme should be in the knowledge of authorities what are being imported but local machinery? In early auspicious days powder, lipsticks and French chandelier and even jewellery and fashion materials, were streaming into this country unchecked, said sources.
They asked should not reserves, remittances and proceeds from privatisation used for poverty alleviation which is hyped day in and day out by all and sundry. And the goods that exceeds exports year in and year out for the sake of said to be development, more jobs and more exports taken for granted for decades are not seen in this country.
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