Prices failed to maintain their firmness on increased selling by the ginners, and spot rate showing a loss of Rs 35 to Rs 2425 on the last day of the week.
WORLD SCENARIO: The cotton contracts opened nearly life time low and with exception of one day, remained under pressure waiting for orders from China, release of weekly export sales and demand and supply reports on October 12, 2006. The under pressure NYCE for quite sometime closed with futures near life time low on the opening day.
The December was down 0.90 to 49.72 and March down 0.73 to 53.48 cents a pound. The operators were pretty nervous who said the market was set for further losses. The analysts noted pressure was due to fundamental factors the absence of sustained buying and import orders from China.
The contracts slid further on Tuesday as China was just getting underway to harvest and until it has grip over its needs delay was bound to continue. The weekly export sales and supply/demand on October 12 was likely to activate buying.
On the third session operators noted slight turn in the situation due to speculative buying though they felt more concerned over other commodities too showing weakness.
They cited liquidation by investment commodity funds and the seasonal pressure provided by the ongoing US cotton harvest has kept the market on the defensive. An analyst said the December contract would need to pierce 50.50 cents or go below the life time low of 49.31 cents to generate more volatility in the market.
He added that automatic buying which would kilck the December contract higher were buying in wait at 50.50 cents, but that selling interest would peter out when the contact approached 49.31 cents.
On Thursday cotton market in New York was no better despite show of strength a day before, small speculators did the kill, contracts drifting lower ahead of demand and supply USDA reports. The export sales provided a little boost as US cotton upland sales lint a marketing year high of 254, 200 RBs. Shipment orders lint 106,100 RBs against 80,900 RBs last week. Now what supply/demand data will dictate as expected towards the end of the coming week.
On Friday further loss was seen in contracts as steady speculative sales kept the market on the defensive. China's cotton output estimate was upgrade but it will not place orders until harvest is complete. Anyway the December contract closed down 0.60 to 49.09 and March down 0.73 to 52.51 cents a pound. Next week USDA will report about supply-demand numbers and players hope trading will see some budge.
LOCAL TRADING: Sort of panic buying was marked on the cotton market following, firstly delay in release of PCGA statement, and then, on it release which showed arrival down compared to this time last year. The spot rate fluctuations were frequent on both sides seen last on Saturday at Rs 2425, without up country expenses.
On Monday steady trend in lifting as well as in prices continued, as delayed publication of the PCGA fortnightly statement had magic effect, seemingly. The spot rate was unchanged at Rs 2450. The Sindh phutti was selling at Rs 1125/1150 and Punjab's at R s1150/1175. The close sources to cotton attributed the firm trend to slow flow due to Ramazan.
What surprised sources was that as to why ginners were upset who had decided to sell at reasonably high prices but could not hold back when millers approached. The PCGA statement guard how to behave under certain circumstances. Nearly seven thousand cotton bales changed hands.
On Tuesday both buyers and sellers were active as prices favoured both. The PCGA statement was awaited making cotton market vital. Brokers were having good time engaging both players for gains. More or less 10,000 bales were sold, so much delay in release of the arrival statement clearly stated the same was smaller than this time last year, such a situation favours ginners but the buyers tuck to market and lifted even more than the quantity during these weeks. The buyers were adamant despite the fact that ginners improved spot rate by Rs 25 to Rs 2475.
Another 10,000 bales more or less changed hands. The lint rate ranged between Rs 2465 and Rs 2525. In one fo these weeks ginners may have been relieved from pling up cotton stock which find no outlet much to the worries of ginners. Often they have to lower prices to please cotton consumers, ginners, who had but to push sales leading to compromise on prices. The delayed PCGA fortnightly statement brought certain good news for the sellers that supply was lower than the supply this time past year.
Now market operators are also trying to reach a point as to why production was lower supply pace was fast. However, players are confused, particularly the ginners who had perceived a better going but on ground they had compromised. The international situation apart, the next PCGA statement will open up some fact which appears to be covered up. On Saturday. Prices were under pressure. Spot rate waslowered to Ps 2425.
REMEMBER YOU HAVE TO GIVE: With probably contribution in efforts of global community led by united states to eliminate so called terrorism the leadership of this country took for granted that country will open up business and investment. If one looks back the desire to have bilateral investment Treaty (BIT) and Trade and Investment Framework Agreement (TIFA) fruit laden tree easy to be picked up as and when desired.
But the fruits appeared quite sour and despite high profile efforts, visit and even visit of US president to this country brought no friction, the recent Pak president visit with hosts of high official whereas all are expecting some understanding lingering on over issues, regarding which poor people in Pakistan were expecting was some trade agreements pending since 3/4 years. But what investment minister had to pour into Pakistanis ears was BIT signing was expected soon. Only some days back the language used after talks in Washington that you can hope agreement by year end.
Those who have become WTO members, like Pakistan expect that not aid but trade would start streaming in. The members have been forgetting that beggars can't dictate terms. The man talking with strength has every thing that it has to realise from poor before giving them. What members have to offer or have offered carries no worth, like 600 people who could have brought dooms day. If poor people do not want to take such warning from somebody seriously keep ready to embrace stone age conditions it is their fault.
Bush himself so optimistically announced that he would not hesitate to track down and kill al Qaeda leader Osama bin Laden and other terror operatives, even if it meant hunding them down on Pakistan soil. Such confidence has been shown by US envoy in Islamabad, US Secy of State Rice, who say Pakistan should do more to stop cross border operations. Pakistan hopes well and good, Pak US council discussion on bilateral investment treaty held at Islamabad on Tuesday ended inconclusively.
The talks on Wednesday was to continue and it was not expected will bend in a deal rather Pakistan would be reminded that it will have to concede Pak-Afghan reconstruction zone to be the least will be okayed. This too because Afghanistan is linked with it. The time is hard. That country is not as flourishing today as it was when Osama was prepared to turn Russians out which he did, how day and fate have changed one is wonder struck, still the repeated show of confidence in Pak leadership of Bush speak that Bush really understands Pak Value.
DEMOCRACY AND COTTON GROWERS: The way democracy is played up and played down seems that can ensure vote for every one who had attained age prescribed by respective countries. The Indian democracy is held in high esteem, sources say with grudge.
But they have taken serious note of cotton growers in India, in shame they had failed to grow more crop for those who did not bother he won't be able to pay the debt. It is not altogether out of place to mention here one reporting about a cotton grower who had committed suicide. But that was not in Pakistan rather. Indian grower who could not stand the shame to be called a debter.
Last week stand according to newspaper report, Indian govt decided to stop death the way growers were dying and has fixed $3.7 bln. The report is blank whether govt institutions were extending cotton grower loan or institution were approachable by growers who feared the more chances was of failure. Besides govt banks or financial institution may not be as cloose, as what report says local money lenders and politicians extended them loan but unlike anywhere in the world govt bank's or recognised respected banks wont play the trick, businessmen and politicians played with the Indian cotton growers.
In Pakistan textile exporters move skies to earth if the loan was extended about 14 or so percut but, hold your breath readers. Indian cotton growers, according to the report most humbly had obligingly accepted loan at 120 pc.
What you think can earth which embraces the cotton seed can grow hopefully as much to return capital, plus 120 pc interest and them save for himself his family. So far the condition was exactly for thecotton growers(or may be other farmers too) to quietly tell people you who roll in wealth and pile up wealth leave no scope for those who borrow at great cost.
The cotton grower who enjoy his and his family vote to those who come to their jhuggies with clmped hands not to retire after winning even losing. The west is today enjoying boax about democracy but cant ensure enough for their neighbours in neighbour or elsewhere in the world. The WTO which in the words power would ensure smiles on every nook and corsrer is laying with Oxygen mask.
THANKS RELENTLY YOURS: When 2005 vision was being given a shape to gift highest forex earning, providing employment to the highest number of street roamers and assuring highest share to GDP, authorities, were dismally blind of the result. The authorities were blushing eyes to see cotton production to rise 14 million and above bales, the more.
And all these were taking root in authorities dream as they had not been consulting mostly cotton yarn and grey cloth exporters or even it had been consulted exporters must have been talking of grace that could have been extracted. The exporters here have been excluded of Garments, Knit wear, Bed wear and Towel who were left alone, according to the exporters.
They talked with the knowledgeable sources and informed them that their request for deter unbridle export of yarn was never heeded to, which fetched eight/ten times more dollar then cotton yarn or grey cloth earned. Pakistan being cotton growing country of excellent quality formally invited foreign textile expert advise local exporters to switch over to value-addition but they were rudely answered with aggressive export of low count yarn.
After all, the authorities too were happy with annaul exports of $6 billion, more or less. Late Dr Mahbulul Haq who had advised South Korea and saw the result , made a vain bid to encourage value addition to increase export earning but he was laughed at, shown in a newspaper cartoon cutting the branch he was sitting on.
The 2005 vision must have been reviewed and results dissected and bisected to find whether results had been different for what the authorities had in mind while planning 2005, the year when effected. This is besides the question ,it still has to see official down. The most progressive countries don't let plans like our 2005 vision or five year plan but rejoice if success is achieved, and, if the result is negative, how and why is probed to ensure in future similar fate of the plan is avoided. The case in Pakistan is different, no vision package is awarded. Let us hope authorities prove to be with vision.
SOMEBODY SHOULD SAY NO TO WTO: The serious talks to thrash out what to give and what not to, between US and Russia ended in failure to meet on October 9, in Geneva. The talks, can you believe are continuing for 13 years. China took as many years to enter WTO. The two big consulting over a decade on finding a solution to enter into WTO. Do the two trust each other? In any ease the two are big but indeed one is super power.
The perceived solution is no where close. On July 21, 2006 in Geneva, according to WTO chief Pascal Lamy, members had come closer, all with some in pocket to contribute positively including poorest, but the super power stuck to his demand all including poorest should concede ground more than they have so far. The WTO chief harassed as he looked announced talks suspended.
How now you can link any hope from coming talks to come out on 4/5 days later. The high profile talks by two members of the FWO reached hopefully close to successful end in Petersburg, but met with same fate. Such big heads with world-wide knowledge knew the problems only.
But where's solution and how the same was to come forward was a distant sound. The doctors go into the details of their patient and once they have the grip prescribe the right medicine. Nearly 40 years have passed but the world leaders and rulers in countries know no cure. What is musing is that Bill Gates and George Soros sorts have piled up wealth and now their banks and fund managers have surrendered to keep piles going further up. So the religiosity penetrated into. But the unfortunate part of the whole story was that the fear was mounting how the poor will be chained once they are made free to soar? The moneyed people have varieties of concerns, illusion and fears. Some are equal like US, EU and Russia they can be talk across the table, Brazil and India are mediocre but could be tolerated for some possible gains but teh poor who stand with begging bowls can be tolerated across the table once global trading opens up equal opportunities for all? How many even know how China bowed to enter the global trading and in how many years. How many know Russia has been talking for 13 years to carve out an equal place but until last week closed quietly fruitless. And if it is allowed it will be for three years a height of disbelief. Is there anybody who can bluntly say the worlds rich and poor are chasing the shadow what is called WTO.
The PCGA fortnightly report incidentally the very first for the season was delayed. There was no valid reason furnished. The one supplied had a degree of confusion. It surprised market men, market continued to behave. The reply was efforts to gather fact was foiled by inclement weather. But ginners were doing business normally and price was also reasonable more from buyers view point. However sketchy but report reaching was that arrival figure had shown much lower than this time last year.
Again spot rate too reacted sensibly as prices remained almost unchanged in ready of take. Spot rate was raised by Rs 25 to Rs 2475 to be dropeed by R s15 withing hours. The local production was being reported to have been damaged and will not reached target. The world cotton production is not as bad and prices are also keeping low. The PCGA should try to maintain time schedule to have grip over cotton trading and price. Under the circumstance next PCGA report will be eagerly awaited to have a grip over local scenario!
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