The cotton consumers are in double mind whether to continue lifting cotton at seasons best cost or wait for fairly large arrivals offering relief. The ginners are in strong position and asking any price looking into the local and world prospect during the week ended on July 7, 2007. The KCA official spot was raised twice to total Rs 75 bringing it up to Rs 2725.
WORLD SCENARIO:
The market operators jubilant at the final planting estimate out to 18-years low acreage and week dolled by Independence Day holiday, left the market on the mercy of selected business during the week ended on July 7, 2007.
The opening contracts were mixed, July at 58 cents and October at 61.65 cents a pound highest this season so far. The opening day ended mixed as long wait come to end allowing some breathing moments. The same was natural consequence of sizzling rally by planting estimate at much lower acreage. The impact being another wait for July 12, for USDA monthly production report.
The second session on Tuesday was no better as investors tracked their position ahead of holiday break - Independence Day - as market consolidated gains sparked by a govt plantings report. The players observed that they were consolidating gains while waiting to see if demand came up. Based on expected harvest acreage that pegged cotton sowings in 2007 at an 18-years low of 11.1 million acres, they said.
Meanwhile they further hoped for a drip, analysts said the market will look for the move higher and further watching production report what kind of impact the planting data will have on output during 2007-08.
Wednesday was closed holiday and Thursday session showed higher trend as it resumed trading after Independence Day holiday. However gains were moderate owing to earnest wait for monthly export sale. The report was delayed due to interruption from holiday. The planting report had given a definite direction, but export sale often helps market by inducing the players to accept the direction and move per best possible ways. Friday ended with substantial gain. The closing contract July was up 60 cents while October was 62.73 cents a pound.
LOCAL TRADING:
The feature of the week was that record breaking raise was effected in local cotton price mainly under impact of world rising trend-above 61 cents a LB. The asking price was above Rs 3000 per maund. The spot rate stayed for some days unchanged at Rs 2650. The change of hands was restricted to one or two deals initially at buyers choice. Some 100 bales of new phutti gained at Shiwal station was sought by millers but ginners were adamant to part with that at Rs 3000 or even more.
However, initially sales were priced at Rs 2900/3000. The spinners and miller in need for whatever was available locally had to buy above price earlier they would have paid. The ginners have been emboldened now and have already asking Rs 3100, though as a rule the consumers were refusing at first. The cotton consumers well in need were hell of lot of worries on rising world trend owing to 18-year low acreage fixed for the seasons.
Buyers are apparently showing restrain but as a matter of fact are panicky taking for granted the orders placed earlier may not cost them 54 cents a pound and around. However, the sectors involved in textile exports are showing deplorable conditions and worried over high cost of doing business. On Wednesday the deals were finished at Rs 3000 and around 400 bales were lifted.
The ginners are firm about price as for this day they had waited for. The consumers have come under pressure to buy local cotton at the maximum of this season. The new crop phulti has been fixed at Rs 1350/1375 per 40 Kg. The spinners and textile millers have been lifting their most urgent and immediate need. But how long they will continue to compromise is to be seen.
On Thursday prices rose by Rs 30 yet to Rs 3030. The market sources were apprehensive if rain do not stop and supplies begin the prices of remaining stock with ginners will go up. The spot rate was maintained Rs 2650, unchanged. The situation is developing in a strange way. Right now ginners have upper hand. What happens in a day or two after will be informed to readers on Friday. On Friday session ended with bullish outlook as consumers feared rains expected to cause ruse in prices creating further problem in textile exports.
On Saturday over 2600 bales of cotton changed hands at prices ranging between Rs 28oo and Rs 3000. KCA spot rate was raised by Rs 50 to Rs 2725, it shows a rise of Rs 75 during the week.
DEMOCRATS SHOW ANGER:
The migration of American farmers to such belts growing better paying crops like corn and wheat. They however seem to be more enjoying rather than are sorry. Compared with this situation African farmers because of extremely low return to their cotton yet they have to migrate. The US farmers know what and how they have to do, as they have finance and subsidy but for African farmers change of area and crop seem to be too horrible dream.
The distantly vague prospect as far as American farmers are concerned seen to be that the US is close to green signal for WTO. Less acreage by 500,000 acres or down to 11.5 million against last season's 12.147 million acres speaks high the US authorities have agreed to reduce further subsidy or the size the EU, Brazil and India are seeking.
Whatever may emerge finally the vague back ground should be important and related to better development - and WTO deal seems likely to better development by Democrats.
Lately US trade representative in Germany and Geneva and other WTO meetings sees ultimate success and a final deal. Nevertheless she is too emphatic that poor countries' role - there ends the matter and explains whether the deal ever get a shape.
So much the rigmarole side by side heightened rhetoric has never found place in newspapers. The WTO Chief Pascal Lamy has seemingly detached from active role as a nurse and is happy with occasional highly pleasant statement. The simple fact is that six years have been lost in talking at different venues but also doing nothing except issuing flowery statement. Meanwhile US has inked an FTA with South Korea, despite opposition from Democrats.
The Democrats in a house meeting blasted similar pact with North America 15 years back. Democrat fear job losses in US and cite America imported 700,000 cars while exported only 5000. Difference over issue remain and about WTO they clearly express was not a priority.
DO ADS ADD TO COST:
The export sectors are in crises, so exporters claim. In fact certain sectors run for some how, then start crying hoarse. Certain sectors have in fact learnt to extract money through clot in Islamabad. Soon the favour is returned through ads and hail of praises for individuals. The sources close to export sectors have watched with glee the gimmicks applied by a certain export sector , in their own words, to survive for decades and more of them.
They wondered dozens of govt coming and going who all were made subservient to whimsicality of exporters who simply never made efforts to see beyond their nose. They expressed bunch of self-seekers deliberately show indifference to bettering skill of labour out of their annual saving or earnings. But instead unskilled were exploited of any job, without investing a penny, except offering two meals a day. Where the money can be expected for Sunday expenses.
Pakistan being an Islamic country needs minimum of ethics practised in business, exports and even daily life. God is remembered all the time not for gifting strength to do good to the exports and economy and country. "Barkat" has no substitute word in any language has been gradually losing from morsel. No wonder all sectors have no accession to show signs of prosperity we hear in Singapore, South Korea, China and India - countries started travel together -some decades back.
For the first time apprehensive authorities, may be also because of elections have issued billions worth of packages for begging export sectors, whose appetite has no end, since authorities were engaged in host of development worth they thought should be attended first. The authorities are also careful in noting how the package money was spent and whether that will help reducing doing high cost of business.
The favours coming from any quarters could be hailed but should be in useful ways. The praise do work, but that should not add to cost of products.
COTTON SHOULD GET GOOD RETURN:
Locally produced cotton should be respected and should be well paid without holding that on various grounds. Time has changed and thinking should also change. American Administration has for- saken cotton farmers of more or less 60 pc subsidy, naturally showing ways to cotton farmers to find crops paying them good price.
According to reports farmers have started migration to farms of their choice where corn or wheat can be grown for better return. The USDA has already announced drastic cut in acreage boosting cotton price internationally by 13 percent or is now selling in the region of 58/60 cents a pound. In cotton market prices here also surged from Rs 2300/2500 to Rs 3000 and above per maund. The consumers have painfully been reporting with a tinge of pain that Pakistan is fourth largest producer of cotton but the farmers obviously failed to meet the local consumers needs.
The consumers have traditionally been accusing for fouling to millers needs. Nobody can help them, the cotton consumers. They always skip and indulge in imports leaving cotton rotting at the ginneries. Even today ginner have some bales of cotton lying left on grounds of low quality. That is besides the question that opportunity has come for the local ginners owing to prices going up in the world markets. Now in all likelihood the millers will elect to lift cotton as far as they would find worthy of use. Had their attitude not so discouraging farmers would have loved to grow more.
India has also reportedly exhausted its surplus and what is left over it will try to preserve for its own use. Now the cotton position is America has such threatening for obvious reason. Under WTO that sometimes is made to look a deal is likely, and subsidy has been cut, cotton production was likely. The fact track negotiating right that Bush enjoyed has either outlived or is facing opposition from Democrats. Their election promises to do nothing that Americans lose jobs. Under WTO farmers will lose subsidy and without subsidy they cant dispose cotton in any quantity the grow. The local farmers be respected and cotton grown should be lifted according to consumers needs instead of arranging cotton from left and right while cotton rot in ginneries.
WHO THE CALL IS AIMED AT?
The WTO after signing by 150 members will be real great prospect for so-called developing countries and a lot of poor struggling to survive. But who the rich is trying to wake up to huge benefits but before that my dear poor put all your wealth in whatever form in the begging bowl, commented sources close to cotton and textile trade. They thought talking with position of strength may be loving game of the powers who have denuded happiness out of the deserving ones.
In any way such calls fate of billions hangs on global trade deal can be poisonous rather than having any philanthropic tinge is far from being fair. In the meanwhile talking about WTO in the reviews is being considered out of any touch with cotton or textile exports or any business. But please look deeper into the global action prospect.
The ready example could be cited how partial opening of the WTO Regina in 2005 exposed entire decades old practice of running business and exports with tax payers money leaving treasury empty. Whether concerned people take relief in accusing high cost of doing business for the state of export earning face today. Any international exports in textile exports if invited to bisect and analyse the deplorable state will converge on one point if at all manufacturers and exporters have invested they restricted the investments to taxpayers money.
Dancing around in Islamabad owned by authorities unfortunately they too have in one or the other business and export sectors seems these days are not working. The TV talks are replete with exporters working absolutely inadequate. One economist cited examples of Japan where, one bad day, exporters tried to walk along Pak ways but Japanese govt instantly rebuffed them asking them to stand on their own feet. The exporters there ever since dare not propose govt for favour with tax payers money for competing in exports.
TAIL PIECE:
Either investigative reporters report or honest officials say tax contribution depicts mismatch, they definitely know as well who default, but such big events, in hundreds and thousand have melted in thin air without catching hold brought to light for culprits but according reports have been punished. Such shinning examples could be seen through binoculars, but punishment as light a removal from govt service and fixed in some private concerns instantly. The result is remembered by all who aspire God help the economy and country.
There are people who look minutely at the subject picked from latest newspapers and with belief that the mismatch is caused by exporters whether be they textile exporters or belonging to some other. Unfortunately it is tax evasion, over invoicing and under invoicing, duty theft or doing wrongs in connivance with the relevant officers if gauged and swift finely with come out the truth that no one from blues comes to commit wrong.
II It has not been responded whether tons and tonnes of imports of chemical and dyes cause much lamented high cost of doing business. But it is a fact in one way or the other Karachi port activity carries certain ship due with chemicals!
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