The apprehensive situation created by continual rains resultantly restricted supplies caused prices push to seasonal peak Rs 3325. The spot rate, too was up by Rs 100 in due course of time to close on Thursday at Rs 3000 during the week ended on August 4,2007.
WORLD SCENARIO:
Futures moved slowly rising or dipping as the players awaited key US Supply/Demand details expected next week with NYBT December contract climbed 1.05 cent to 64.55 cents a pound on opening day. However the day's trading were marked by WTO preliminary ruling on Brazil's suit against US cotton subsides. Due to WTO's ruling, US growers may see a reduction in govt subsidies which are more than the world poor gets as aid from that country. Meanwhile for day to day trading next week is important when supply/demand numbers will be out.
The second session also ended with gains as end of the month buying by funds was marked. The NYBT December rose second day by 0.35 to 64.90 cents a pound. Meanwhile USDA data is vital for obvious reason because it will contain the first detailed outlook for cotton market in 2007-08 (August/July) open outcry volume stock on Monday at 2869 lots while scream business reached 11,018 lots.
On Wednesday as a sequence to market consolidation in narrow band ahead of supply/demand report. NYBT December contract lost 0.64 cent to 64.26 cents a pound. Meanwhile fears of additional problems in the mortgage sector could bleed into the cotton market. Traders observed "that's in the back of financial traders minds." Open outcry volume stood at 3,966 lots while screen business reached 10,088 lots.
On Thursday mixed price patterns were noted with touch of firmness. The rising trend was dearly there but the deterrent was uncertainty ahead of key US supply/demand data in a couple of days. The NYBT December cont was up 0.32 cent to 64.58 cents a pound. Since other crops have also been affecting cotton players thout it was just higher off grains, but fund intervened before close of the day's trading exports were, they observed pretty good which contributed to early rally as China, Turkey and Thai and helped.
ALOCAL TRADING:
The fears of persistent rains, both in Sindh and Punjab had genuinely made cotton buyers apprehensive about prices which by the middle of the week gained another Rs 50 to Rs 2950 while asking price in ready touched the peak at Rs 3200 per maund. The ginners who at one time shuddered what would lead to the pile up though according to them pretty manageable, finally came to their help.
The buyers became more cautious hence modest buying on the first day of the week. Over one thousand bales were lifted as both the buyers and sellers derived much satisfaction. Mainly old bales were lifted. The spot rate stayed put at Rs 2900 while rates in ready ranged between Rs 3090/3150. On second days trading rise in ready was marked as the peak which was splintered apart next day. As usual rains proved good for the crop said some but some other had another view. The supplies remain low.
Phutti in Sindh was selling at Rs 1450/1500 while in Punjab it cost Rs 1500 Rs 1550. On Wednesday asking prices peaked at Rs 3200 while spot rate was up by Rs 50 to Rs 2950. The arrival from abroad in size of some three million has not been regularly reported. The prices are on the rise in countries Pakistan prefer to buy from. The sellers were cautious and disposing of cotton keeping in view prevalent prices in foreign countries.
Meanwhile, WTO ruling against America is awaited whether that will field good effect. Brazil had charged America for acting against WTO rule and reconciliatory body has accepted urging America to come to terms. Over 3000 bales were marked lifted between Rs 3190/3200.
On Thursday spot rate was enriched by another Rs 50 to Rs 3000, reflecting there seems no respite in price flexibility. The crop of damage which has not been assessed so far rather is being fixed at speculation may hurt the trading. However since imports frequency is also resting on silence nothing can be said with certainty evident from both sellers and buyers attitude. Buying was encouraging in Sindh lots.
On Friday firmness prevailed as prices held overnight levels. About 2000 bales changed hands.. On Saturday activity picked up as over 3500 bales were bought mostly by millers prices remained range bound. Spot rate remained at Rs 3000.
SOMEBODY HAD THIS JOB TO DO:
The venue for talks on progress of WTO had changed a year back from Geneva and the EU to Mexico, India and other places. Those who were in the thick of the problem of WTO or so called Doha round were straining their all six senses and wisdom to bottom the lurking problem. But they had to be content with rosy juicy and sweet statements from the chief Pascal Lamy, trade ministers of important WTO members such as US but the round was not coming near any solution and finally to end.
Pascal Lamy had often scented the good flavour coming out of the meetings and had hastened to tell the sickening world populace that WTO solution was round the corner. The statements then were turned and twisted more times to make believe that WTO is at arms stretch. Then Brazil was chosen the venue to extract more then what it had as the leader of so- called developing countries, but a couple of meetings was down with a thud. The top leaders, including Bush, came in front to impress the discouraged neatly 152 WTO members, no, rather the shout at developing countries to accede more to own and earn one day billion of dollars.
The equally big power the European Union reminded the US to behave and give more to see WTO finale. But he had sigh of relief when the fast track negotiating power dwindled. Naturally then the leader of the developing countries Brazil had to come with stark truth that "if welcomed a preliminary WTO report in US subsidies to its cotton growers, saying it upheld their complaint that Washington was not abiding by trade rules.
It also threatened to retaliate if the full WTO report that is due out in October, found that US had failed to fulfil an earlier order to remove the subsidies. Brazil was greatly satisfied by the concessions made in the report and that it takes into consideration Brazil's concern that measures taken by the US to address the issue are not Enough." Brazil believed that its cotton producers were being harmed by US subsidies given to US own cotton farmers.
The WTO ruled in 2005 that the aid amounted to illegal subsides. Brazils in 2005 had asked for the right to impose billions of dollars worth of sanctions on US but agreed to wait until final WTO decision. Can anybody guess plight of cotton growers in Africa of decision not forced on the US?
BUT FOR ONE WORD:
A recent report indicated that all textile related trade bodies currently knocking every door to look and attend to their plight. It was in December, 2006. Some question were framed that was supposed to relieve both govt and the trade bodies. But six months have passed the trade bodies are showing utter indifference on the matter. The report said textile ministry seriously followed up the matter with five reminders after sufficient gups hoping an understanding and resolution of the problem will be traced out. But ministry that sent last reminder as back as July 24, 2007, was answered with usual silence.
The knowledgeable sources said, if the memory is working, the minister and the exporters did nut attend the meeting. So far, the sources recalled time that textile or any export sector whether govt had in view to cure them from exchequer.
The banks and govt money had probably been thrown down the drains just to be remained on day that the units have not remand operational any more. The SBP not many days back answered to a questioner that in future, too, write offs will be allowed. This is how seemingly exports have been made but without ensuring stability. The names of any country whivhe give happiness, but not without hurting that they have been earning far more forex than Pakistan not to speak of oft repeated countries like India and China but Bangladesh, Thailand and Vietnam.
The report hinted that there were always ups and downs in all sectors which have to be managed by the concerned sector, the sore point. Too much painful which was never heard and acceptable!
WRONG HEADLINE?
It often happens that wrong headline is framed in contract to what report contains on its body. But it rarely so happens. Actually often even most careful reader makes mistake to know only seconds later so. It happened on July 28 when readers' eyes were attracted to a headline "BOP urged to support textile Industry." Readers realised shortly that new content very much vibrated what was in headline. Three para news voiced textile sector is faced with high cost of doing business and hence textile industry urged solitary Bank of Pakistan to stay complete in world markets.
Very lately textile bodies have mushroomed to make shouts louder still. So for so good, but calling for help only BOP is beyond comprehension. The bank has nodded positively as it probably either not to its knowledge the number of units which fell sick in due course and died, sparing banks to barely survive on determination to avoid extending loans and if no way out was there at great cost.
The only bank has held out assurance to stand by textile exporters, and if it really stood by nearly over 400 units it is a matter to wait, let us wait. In the meanwhile keep an eye in fluctuating textile exports relevant people on certain path to fail the govt fixed target at 20 billion. The world emphasises research and development along with dozens of factors for better and competitive products such as manpower development, effluent treatment plant, investment etc, but all these supposed to rain from skies by millers and exporters.
Elections make leaders weak people, sources close to business and exporters take undue advantage. Either govt comes to their rescue or fall to the designs of interested quarters. Today what seems more imminent is R&D which had never thought of. Now the controversy is over 3 pc, 5 or 6 pc. Nobody bother how much he or they earn for the exchequer but are always willing to excel other in demanding and getting from Govt or banks!
LET THAT NOT BE TRUE:
The genuine concern should be for any cotton belt of the country, more specially it is known for its good quality cotton the world over. The monsoon period is welcome for crop healthy growth but it cause harm also such as the crop goes suffering from such deadly diseases like white fly attacks, with bug and cotton leaf curl virus (CLCV). The monsoon season say the knowledgeable circles, should not only be taken as a matter of routine but certain degree of readiness is needed for any thing untoward.
But the report alleges rather vividly that agri deptt has no plans at hand to counter it. Since the area is famous for its good quality cotton and is certain producer of 1.6 million cotton bales annually. The report points out that recent attack can bring a significant downfall to the yield.
Unless efforts, during these rainy days are not stepped up and every bale in all cotton producing area of Sindh and Punjab is not saved the crisis will be seen at the end of the cotton season when the consumers of cotton need that most for one or the other reason cotton world over sees much more rise than when losses are saved.
According to report, the agri deptt don't seem to have learnt lesson from last season and are not in match with the expected losses. The report said more losses are expected but the relevant deptts are sleeping and as the report says more damages are likely which could be tackled successfully.
The govt deptts also fail in keeping an eye on sellers of fake pesticides nor they have any guidance to offer by experts and bad weather of course is out of human reach. Much rested with the experts and researches but what they could offer in answer that they have never been awarded enough to give an effective answer to stamp out the pest. The past decades are enough proof of utter failure. The report's words could be noted with care.
The farmers applied the pesticides recommended by relevant officials but they hastened to allege that some officials received commission, the result could be seen. The farmers expect worst in coming days as the relevant officials they claimed have not come out of their cosy repeat cosy offices with any remedies to rescue the victims.
They said 20 to 25 pc crop is under attack in the area and more. The farmers contradicted official claims for training farmers to effectively handle befalls but the farmers had this to say: No agri depptt officials ever visited the fields to gather data or guide the farmers. They demanded good quality pesticides be made against soft loans. Will that be enough?
TAIL PIECE: Both the sisters cotton and sugar be accorded due respect in view of the possible dispute, be it of any kind. Both have, instead of being strong point for economy of the country, have rather hit hard at the very root of the economy and country. And unfortunately one of the two has developed grudge against setting of more sugar mills in cotton areas, which needs more water and causes environmental damage for cotton crop.
The govt is pressurig cotton growers to grow more to meet the growing export prospects. The sugar mills are preferred as they ensure undue profit in case production is higher than needs of 18 million people. If, however, weather failure or less production undue profit goes large. Cotton has helped exports and created elites of order, while sugar can make and unmake president or prime ministers.
Thus far the circles to cotton and sugar trade said both are beyond the reach of any control of any strongest in the country. The two powerful sectors seem to be at odds who prevails upon who will depend which the clout has the inclination. Pray well-wishers of the economy the issue is resolved with out hurting much to exports. Today related textile exports are on the period, while the other causes enormous worry to the poor - poor consumers!
Comments
Comments are closed.