How textile exports will fare will be a patient wait as cotton availability locally and internationally is becoming scarce and at higher prices, to a great extent confusion over when and how to buy and when to import. The spot rate had several jump during the week under review and rates in ready too rose to season's highest Rs 3100. KCA spot rate rose further to Rs 28050 on Friday and remained unchanged on Saturday.
WORLD SCENARIO:
Sharp and continued rise sent futures to leap above 60 dents during the week as 18-year low acreage was expected to be planted while worry about weather overawed the farmers for deciding to leave cotton and go for switch over to some other crop.
On the opening dayfutures were up around 0.50 cent. The traders reported that resistance for December was marked at season's high at 65.18 cents a pound.
On Tuesday gain was placed at 0.40 cent based on market orders. Traders reported resistance was further up. December at 66.75 cents. The contracts moved in higher range between 66.15 and 67.05 cents a pound.
The consumers who were banking on NYCE cotton were expressing worry particularly those countries that could not keep pace with their own needs like Pakistan. China had gauged these bad moments and had maintained output at maximum so that if needed, to import as low quantity as possible. India was going fast with its surplus but came to senses and is likely to face exports squarely.
On Wednesday cotton trading in NYCF sustained rising trend owing to speculators and funds interest in buying, taking for granted stocks will not be available as and when one would like to lift. Traders said funds are gradually and slowly increasing their net long position despite fact that funds still have enough room to add further. They added that spec/hedge report has shown cotton's steep gain have mostly been due to funds covering their short position.
On Thursday the rising trend was seen having sustained giving the textile exporters world over to ponder how they have to tackle the somber situation. Pakistan where cotton start to be discarded on various ground with two months giving open ground for imports. This stand is old enough to ignore. Cotton consumers have insisted on the imports because they turn to every corner where cheaper cotton is available.
However, on Thursday futures jump was modest. Other crops had pressure on cotton for a dip, but the loss appeared modest. In the meantime October contract stayed put at 65.25 cents while December was up 0.13 cent to 67.05 cents a pound. The trend was unlikely to go reverse unless some befalls are seen on Friday and beyond.
The rising trend persisted on NYCE trading on Friday, as low acreage and low production will keep demand high. However, October contract gained sharply by 1.24 cents to 66.49 and December up by 1.33 cents to 68.38 cents a pound.
LOCAL TRADING:
The opening session in local trading was most shocking day as prices hit new season's high and announcing worst days were ahead. The millers, however more then willing t0 pounce on available cotton, which they had been avoiding with distance. The rains have no feeling for the cotton consumers who weigh with qualification or without the same. Often they pressure ginners for nothing except to force them to low prices at great ginners cost. But situation has changed absolutely and ginners have command over movement.
On Monday cotton lifted was in low quality. Buyers hoping rains will discontinue and supply will turn normal. Hereby some hundred bales were picked up but the developing situation gave them insight to go full length but the developments moved faster.
The second session saw quick leap of Rs 50 in the spot rate at Rs 2775. Nearly 2000 bales were lifted hoping that next day will bring worst day in respect of price. The world rate continued to be discouraging. India had sold even to Pak the surplus and mills are contemplating whether the available stock will meet their needs or imports at great cost will be must.
On Wednesday spot rate climbed further higher to Rs 2800. In ready some bales were lifted in price range of Rs 2800 to Rs 2975. Nearly 1000 bales changed hands. Cotton from Mirpurkhas sold around 200 bales (ready delivery), 100 bales from Sanghar for August 14 delivery and the rest around 700 bales changed hands between exporters to mill.
The rains and restricted ready supplies have allured exporters and mills to buy cotton to avoid likely higher rates, which is evident due to inclement weather not coming to end. The exporters of textile product must be unhappy at the scare availability of local cotton.
Importing with immunity any quantity from abroad showed an impossibility as rising prices are seen in New York trading which has leaped to 67 cents a pound. Anyway weather remaining unfavourable and cotton availability remaining low the exporters must be worried how to reach the export large a $16 billion.
On Thursday, reports said panic buying was marked obviously because consumers wait price to come sown ended in disappointment spinners and millers could influence local cotton prices but they had no control over the international surging prices. The result was spot rate pushed higher by Rs 50 to Rs 2850 and in ready asking price seen between Rs 2975 and Rs 3100.
Nearly 1000 bales were lifted by consumers on Friday in the price range of Rs 2900/3100. The spot rate remained put at Rs 2850. The new crop arrival is said to be slow naturally keeping pressure on prices. The ginners are in driving seat and are in no hurry to sell unless they get ruling prices. On Saturday there was no change in the scenario and firmness prevailed.
BE TEXTILE EXPORT OR:
Our exports, be it that of yarn, textiles or sports goods or any export sector would not have suffered to this extent on grounds of high cost of doing business.
The rulers of the moment have been victim of remaining subservient yo the to the exporters. So circles close to textile exports say. The govt expects in return to see taxes paid without any reservation so that other development work could be attended exactly the way exports are looked after. Unfortunately Muslim countries had always talked to form a body for doing trade and commerce done under Islamic rules and value.
But the body melted away much before thinking of right thinking people could give the body a shape, America could allure majority of strong Muslim countries in bond and friendship. But OIC never proved till that date it could neither influence with its decision to its own members nor other who give least importance. A special body was being planned by some countries to develop trade and investment.
But talking low without strength has resulted in nowhere. America could sign trade and commercial relations with some Islamic countries and regional countries but with Islam as strong bond Muslim countries remained just as a startled spectators. Once again whisper is in the air that OIC business owners body is expecting to launch by November 2007. What is more importantly being proposed is "Vitally action of the ethical values in the commercial transactions, special awareness of the Islamic economic concept lately TV channels so have debates and comments about ethical values and importance of truth in trade commerce.
The commentators don't show any sympathy with the slogan raisers, like high cost of doing business. Even Karachi Nazim harassed by allegations claimed non-was speaking truth as this is not the running currency. Today. quite a few leaders spring up in the country to take country to path of progress and prosperity. On top was as elders hinted that Ayub Khan. But once in power, he was made powerless by the self-seekers.
At the dying moment when he was approached to resign, he agreed with pains saying he of course wont like to see country breaking before my eyes. All who followed him fell prey to self-seekers and who they were people with no ethical values may be OIC body revives this in Muslim of Pakistan and world indeed!
REGRETS FOR COTTON CONSUMERS:
If consuming instead of consumers had needs in view this day would not have faced them with regrets. Thrift is one thing, close to trade values, to safe time and money to compete in the world market. The past is evident that cunning and not the thrift is used to threat cotton sellers to keep price low or either wont buy or indulge in imports. How much this is true and it had degree of craft know circles who observe which way the cotton production, demand, sales and pile up.
Not many weeks back, but merely a couple of weeks back the cotton was selling at Rs 2525, even less than this earlier. But cotton consumers like game of blinding the growers and ginners with threat they must bring price down to be acceptable to them. Cotton is very sensitive stuff that gets yellow or lose quality if not disposed of as early as possible. This fact offers good game to the consumers who have been to open world market to import as much as they can.
This season was not different from the practice that has been decades old. The ginners who came under pressure at times sell cotton at reasonably low price to save from getting genuinely or other wise pale or lose quality. Applying old habits consumers have ordered more or less three million bales, some bales have been delivered.
But lately the world cotton sels watch leaping price higher will hold on to the agreed price when order was placed. The world suppliers are more conscious and cunning and there is less likelihood would be naïve enough deliver cotton at buyers door without showing the wisdom, the buyers show from the time they lift the first bale. In local markets harassed ginners are now holding firm rising price around the world.
When they were quoting Rs 2300/2525 per maund consumers were refusing on either quality ground or price. Today the rains have made picture hazy and tricky. Has pest attack been seen besides. the disruption of supply due to continuous rains. The local cotton naturally with the development in local condition as well as world rising trend price are up Rs 3000/3100. The new arrivals-new crop is selling at Rs 2800 or around why only the sellers and buyers can vividly say!
OPTIMISTS ON WTO:
Global trading is very much linked to businesses and exports and hence weekly comment should be decorated in the pages of newspapers to keep billion of people whose fate can change for better. The headline WTO can still clinch Doha deal this year has come from Indian commerce minister Kamal Nath.
Optimism is good enough but a member of the developing country can hardly justify what he sees through. This is a desperate statement after talks with another developing country member from Brazil. Lately these two are always stay in front, which gives a tinge to something going underhand.
The richer people are talking in normal way showing they are strong they are belly-full and are not least careful about the boost in fate of poor who have suffered for centuries and are still not out of wood. India interlocutor on deal that may give WTO a bright look with life hopes to have met the European trade commissioner Peter Mandelson to move Doha round forward.
The EU's Pascal Lamy is the chief of WTO uses flowery English to show he would be able to put life into WTO. But when some other by powers come in the way, he starts trembling. His Union's some of big size members have warned to add a penny more than what EU has committed already.
Similarly, the super power that has even refused to do its part in tackling global warning despite its tremendous development which had caused warming in a big way. Al Gore deems to have felt the wrong his country has done has openly questioned the US stand on talking global warning.
However, the latest is that the two developing countries Brazil and India are seemingly being forced to help the bigger brother in remaining rich by allowing further access to exports of rich countries products. Since the Doha round should be given oxygen before the year is out, and the developing countries are under threat to part with some to enjoy some. It would only be observed and experienced if WTO is given a respectable shape and the not too much different shape of poor of the world!
ALTERNATIVE TO WTO:
Bush a dye hard American, and no harm if one feels and love his country's interest had not delay too long to go for alternative good against WTO. He could visualise the ultimate failure of the WTO or near to it. And went for regional FTA with south American-Mexico, Pero, and jumped thousand of miles to secure American trade with oil rich Arab countries, appeased India with N-grace, sought FTA with Apec countries and stuck half hearted to WTO also showing the world he had love for the poor (developing countries).
Allow mire access to the goods and services of developed countries for their own gains. The WTO developing countries Brazil and India so called representatives of the developing nations were being sought to give more for more gains, but the two held on to what they had to offer against charity of the rich countries.
Now circles close to trade and commerce in globalisation have been plunged head on in surprise when they went through the resolve of Apec trade ministers pledging strong support for global trade talks but, so that no one is left in dark, revealed effective answer that they were likewise Bush looking into alternative possibility of an Asia pacific free trade area. Indeed a praiseworthy plan which was certainly going to yield, better than the hurriedly arranged by Bush.
The Democrats, not any less American to Bushes are firm that without a lot of changes in the deals struck by Bush to suit congress will not be acceptable to Democrats. The latter even bent upon to lay blockade to fast track negotiation possibility for eliminating chances of finalising deal by the year-end. But enthusiasm being shown by the Apec trade ministers is invalid, despite firm belief and demonstration of necessary will.
The trade minister thought that ambitions and balanced approach will require volumes to express what they meant. Use whatever words yon had found attractive and meaningful but who and how gone through difficult rather impossible exercises. The Apec trade minister would do better to concentrate on going some effective shape to Asia Pacific free trade.
TAIL PIECE:
A latter in BR on June 14, 2007 has attracted too many interested quarters from both camps. One charging the other opposing. The letter was written by some one Javairia. "No limit to greed by textile sector" like hundreds of letters digging at the wrongs prevailing in this highly corrupt country will soon be out of mind. Or may be that textile exporters a bit ponder if the original writer had nearly desired to turn like genuine exporters of any products.
But the series of letters on the subject-greed or like things-particularly efforts to defend the allegation seem too much as that has given a lot more disinterested selves what was going around in premier export sector-textile sector. America can afford billions of dollars or so to say much more than it sets apart the billions of poor of the world to its farmers, who in return pay honestly what is due them. Every penny.
How strange that any delay in collecting taxes - taxpayers ring the collector they were making to Loss State. The tax collector as is given to understand that collectors rush and state is saved from loss. In case of Pakistan, not to start a new debate. The total pays taxes half heatedly and partially, which number just 10 pc or so of FBR has on list.People paying more for wheat flour due to artificial shortage.
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