Cotton business remains modest

Monday session saw trading in cotton resuming modestly as players adroitly awaited a relaxed attitude in respect of prices, besides being in no hurry as buyers had done enough shopping before Eid-ul-Azha, during the week ended on January 13, 2007. Spot was sticking at Rs 2500 until Saturday close.
WORLD SCENARIO:
Cotton on NYCE traded firmly on Monday due to speculative buying, but most players had eyes on news that could send market burst into buying, during the week ended on January 13, 2007.The March opened higher by 0.11 cents to 54.53 cents a pound and May up 0.27 cent to 55.38 cents.
On Tuesday disinterested sellers/buyers awaited for news from USDA and China but complete silence was around. The USDA will break silence on account of weekly export sales but not before Thursday.
The market operators were quite nervous like because cotton glut was worrisome unless world consumption soar.
On Wednesday sustained previous day's trend as futures suffered modest losses in the wake of selling experienced in futures beyond cotton market. The resistance to fall is being foiled by general fund selling as the same is continuing ever since the start of the year. However analysts observed that market operators continue to wait for news about weekly export sales and shipments.
And above all the monthly supply/demand report immediately after export sales report will give direction to market for future trading patterns. On Thursday speculative selling again pulling futures down but for commercial buyers who intervened and saved futures from further drift downward. Analysts were in wait to look for news signalling strong world cotton consumption and demand, China being the foremost buyer. Weekly export sales are too awaited to help players plan future. Anyway one day remaining the week seems would end in wait.
The cotton/supply and demand report is also expected any moment. The turn was seen on the last session as futures claimed use with March up 0.11 cent to 54.04 and May up 0.03 to 54.78 cents a pound. Players wait had not ended for report about Monthly supply/demand and China's thinking.
LOCAL TRADING:
The optimistic cotton consumers were expecting price downward trend on two counts. Primarily they had come to believe that not only world over but in Pakistan too, production would match need if not surpass. Besides they were expecting TCP fielding men to sell around 14,000 bales. Ginners maintained both spot rate and rate in ready firm against the perception of buyers. Low lifting resumed after market reopened.
On Monday cautions buying was marked with couple of premium lots lifted. Buyers are not in a hurry to pounce on buying all what sellers were offering. Better quality cotton was always welcome.
On the second day too buying remained restricted to two deals. The spinners and textile millers were in relaxed position though ginners were over conscious that nearly nil buying before Eid-ul-Azha holiday, buyers will just lift whatever sellers had to offer. The spot remained unchanged and ready going was between Rs 2350/2600 depending on quality.
On Wednesday modest selling was sustained with around change of hand of 14,000 bales at prices ranging between Rs 2485 and Rs 2575, spot unchanged at Rs 2500.
On Thursday depressed tone was apparent as consumers were making noise about shortfall and imports from India. The TCP has sold 8,000 bales of cotton to spinners seemingly not of good quality at Rs 2163 and Rs 2300 per maunds.
In ready also tone was suppressed as a few bales were lifted at Rs 2425 and Rs 2575. Spot stayed unchanged.
On Friday millers were in the market with aggressive mood to lift all available lots. The sellers, however resisted but to sell and under pressure of threat that imports were likely. They are holding back better quality cotton left with them. Around 3,000 bales were sold. Spot rate remained unchanged at Rs 2500 and sale in ready grabbed prices between Rs 2575/2585.
ON SATURDAY MODEST BUSINESS WAS AT HIGHER PRICES:
As ginners stuck to their guns, Best type of cotton is expected to etch higher prices next week.
COTTON PURCHASE OR....
The authorities have once again made it clear that some lacuna exists in importing cotton from India by land or rail route. The problem however has not been made known. Some weeks back around 10,000 bales had been landed near Wagah and same had to be returned. The Agriculture ministry was worried that the imports before January would hurt growers. The time schedule has arrived and authorities seem to have been in the grip of situation. The sources close to cotton trade believe that country is likely to produce below target at 12.5 million bales.
Since consumers hardly let know producers or authorities know the correct figure of consumption to keep prices low, it is very difficult to determine the correct needs. The PCGA, which issues fortnightly arrival position never misses the chance exploiting production figure. Only in recent months on rain and viral attacks pretax for several days arrival report was held up. Some umpiring is required with keener monitoring by either Cotton Crop Assessment Committee or any private agency with deeper knowledge and people manning should not be vested ones and guide the planners. The things like correct figures of cotton production so far remains out of reach of planners.
The most important economic figures supplied by FBS or SBP sometime don't coincide.
This season SBP had quite often pointed to such discrepancy. The problem needs immediate solution to place economic progress in place. The cotton production and sugar sector need to be watched by impartial people rather than by Agr. or Commerce ministries to avoid losses. These too are, since WTO potential have increased the prospect of increase in export, so more cotton is needed but the figure is hardly in anybody's grip. But the decision to look for other countries to meet the cotton shortfall such as commonwealth of independent states. Even some Africa states could be contacted.
However, sources put out one thing why textile sector insists on importing cotton is because finer quality of cotton is suggested by yarn and made-up importers. The orders against BD received by Pakistan should boost exporters sagging morale! But Pakistan exporters will have to diversify exports for positive results. Unfortunately tradition has been to look towards the US and EU. The exporters probably have felt the wrong in keeping markets limited. Ukraine and some other countries look for made-ups from Pakistan but so far Pakistanis have not cared a bit. They should not expect some country's orders will be diverted to them as BD's order have been to Pak exporters around $1,200 million in all so far.
EXPORTERS ARE ALERT:
The worrisome gradual depressing in textile product's exports has primarily alerted all those who were linked somehow with cotton and textiles. Naturally worried to a great extent was govt who had become complacent on spectacular rise in GDP FDI and investment, rise in remittances from Pakistani's working abroad. But since some months textile exporters appeared nervous and were in need of govt help to re-float the sector.
Govt claiming and often recounting great progress during its stay in govt got somewhat panicky, in front being election win necessary to keep policies in tact. With textile exporters joined in chorus were all sector exporters. Some steps thus are required to resist the trend with resources available with the govt.
The sectors found the govt steps somewhat unusual and even unprecedented. It was now their turn to feel harassed because how sector had treated custom duty rules and under invoicing our international study had shown was being extensively misused. The custom official had been prompted to immediately correct the practice. The exporters who had been worried on the US and EU count for turning the decades old fine ties but when their help was required to expand trade and exports, particularly in view of the WTO advent, they had simply turned back. The fact however was that Pakistan exporters have been thoroughly ignored despite in the words of govt and exporters full throng fight along with western countries against terrorism.
At early stage Pakistan was appreciated in words and deeds some dollars had also rolled down in govt kitty. That encouraged the leadership to the extent that it loudly disclaimed aid and in equal strength pronounced that Pakistan needs trade. The FIA that was expected to materialise soon as back as 2002, was very lately by ministers making over half a dozen trips to the US that early 2007 could be expected. The year has come with chill all over. The question remains whether the hope will ever see the down. The govt switch over has made the drama ever more dramatic.
KARACHI TEXTILE CITY:
The Textile City related reports are marked only in this province. The earlier story narrated was that PQA had held part of 1200 acres which now has been released at the intervention of the PM. Similar project in Lahore and Faisalabad are not heard or may have been shelved. The head on plunge in textile exports had given sort of indication that the opposition to any project and call for patronising with or without worth the existing limping projects should be made to work The govt must have been disappointed with the result of textile exports. It however extended help and is helping in every possible way as not to harm the exports.
The FDI is coming, the expatriates are sending remittances more than ever in the past, and crop position is stated to be promising, but should govt be so kind to the exporters if the country was not already in the election hub. It is hoped by circles close to exports thought, the authorities must have studied the background that exports showed overnight slump pointing to that horrible old days when export earnings would refuse to budge. Surprisingly the first Textile City will sec the dawn in good surrounding. Naked eyes can see some road expansions, bridges, over bridges, and under pass, though heaps of building material littered all over lake away the beauty.
The most encouraging however is what should attract foreign and local investors are the exclusive export zones, to ensure smooth goings from the factory to ports. It is not clear whether Karachi Textile City officials have already taken position of the entire land and initial development work has started. However, one prays Karachi Textile City starts operation before knowledge based sectors see the dawn of the day and operations live up to the expectations of the lovers of economy and the country!
Some leading world powers have been trying the solely dependent exporters on them. The European Union has long been warning on one or the other count such as imposition of anti-dumping duty and completely depriving Pak of GSP while competitors are enjoying all facilities. The Union has turned down deaf ear to reasonable logic. Pakistan offers of FTA was can be said to have been disdainfully rejected while footing the distance to India to seek FTA. Is this because the Union has taken for granted Pakistan textile exports are facing survival or otherwise or even worse the long friendship has now out lived utility.
The recent threat of sanctions has sort of tinge of certain powers generally used to, cannot it be also seen as interference in Pak internal matters, political or economic. All these missile firings should open eyes of Pakistanis who should tighten belts in making Pakistan a really strong country. How hollow the cry of being front ranking fighter along with countries openly favouring anyone but Pakistan.
Do you hear Pakistanis look to your own strength and compare with Turkey, has guts to see eye to eye to powers. During 2007 it has targeted export earning up to $100 billion. Pakistan's $20 billion target in clearly not practicable. In matters of exports South Korea is far better than us, with $100 billion or around with much less resources than Pakistan. No use but South Korea answers it is grateful to late Dr Mahbubul Haq, particularly his advice they followed on exports more particularly of textile.
The Pakistanis with eyes on Islamabad corridors of power have shown they can't stand to hard times if ever they have to face. Vast majority of EU threat of sanctions has taken seriously how our own made weakness has emboldened the world economic powers to play with sentiments, it is expected Pak will make good use of the opportunity the painful event in BD has offered Pakistan's business worth $500 million. The BD elections issue that has been depriving of their share in markets the powerful economies remain unresolved. Pakistan may get some more but will it get all? Certainly not as conditions around seems quite hostile. Pakistanis wake up.
TAIL PIECE:
The post harvest losses have been talked for decades. Even today reports say losses have been enormous. The crops including cotton have continued to be imported despite Pak being agriculture country. The research for good seed varieties has not been worthwhile, spurious drugs continue to create havoc unchecked, no silos or store house and discarded soul, farmers, cotton growers have always responded to call for more cotton.
But when growers come up to expectations, despite TCP, they often had to burn their crops for getting much less return.
REASON: the culture of imports has continued without check on pretext of country being short of cotton. The Minfal created history by holding back cotton imported recently. As it rightly said imports when it will be confirmed cotton is short of need, but soon after another call was hurled in the air that three million bales will be required to be imported as locally the golden fibre is not produced.
Minfal should come forward whether three million bales imports are real need or consumers are trying thus to influence reasonable low prices. Textile sector is used to import cotton any lint, textile machinery, chemicals and dyes that make cost of production high! And there is nobody to calculate how much was spent on foreign exchange earned by this sector?