AGL 38.54 Increased By ▲ 0.97 (2.58%)
AIRLINK 129.50 Decreased By ▼ -3.00 (-2.26%)
BOP 5.61 Decreased By ▼ -0.03 (-0.53%)
CNERGY 3.86 Increased By ▲ 0.09 (2.39%)
DCL 8.73 Decreased By ▼ -0.14 (-1.58%)
DFML 41.76 Increased By ▲ 0.76 (1.85%)
DGKC 88.30 Decreased By ▼ -1.86 (-2.06%)
FCCL 35.00 Decreased By ▼ -0.08 (-0.23%)
FFBL 67.35 Increased By ▲ 0.85 (1.28%)
FFL 10.61 Increased By ▲ 0.46 (4.53%)
HUBC 108.76 Increased By ▲ 2.36 (2.22%)
HUMNL 14.66 Increased By ▲ 1.26 (9.4%)
KEL 4.75 Decreased By ▼ -0.11 (-2.26%)
KOSM 6.95 Increased By ▲ 0.10 (1.46%)
MLCF 41.65 Decreased By ▼ -0.15 (-0.36%)
NBP 59.60 Increased By ▲ 1.02 (1.74%)
OGDC 183.00 Increased By ▲ 1.75 (0.97%)
PAEL 26.25 Increased By ▲ 0.55 (2.14%)
PIBTL 5.97 Increased By ▲ 0.14 (2.4%)
PPL 146.70 Decreased By ▼ -1.70 (-1.15%)
PRL 23.61 Increased By ▲ 0.39 (1.68%)
PTC 16.56 Increased By ▲ 1.32 (8.66%)
SEARL 68.30 Decreased By ▼ -0.49 (-0.71%)
TELE 7.23 Decreased By ▼ -0.01 (-0.14%)
TOMCL 35.95 Decreased By ▼ -0.05 (-0.14%)
TPLP 7.85 Increased By ▲ 0.45 (6.08%)
TREET 14.20 Decreased By ▼ -0.04 (-0.28%)
TRG 50.45 Decreased By ▼ -0.40 (-0.79%)
UNITY 26.75 Increased By ▲ 0.35 (1.33%)
WTL 1.21 No Change ▼ 0.00 (0%)
BR100 9,806 Increased By 37.8 (0.39%)
BR30 29,678 Increased By 278.1 (0.95%)
KSE100 92,304 Increased By 366.3 (0.4%)
KSE30 28,840 Increased By 96.6 (0.34%)

This time, new crop sowing in early crop area of Sindh province has started earlier than last year as wheat harvesting was completed earlier. Also in some parts of Central Punjab, cotton sowing has also commenced. In Pakistan, specially in Sindh, cotton sowing would be completed earlier than last year under the impression that early sown cotton crop gives better result in terms of yield per hector and also lesser pest attack.
Thus, harvesting of new crop (2009-10 season) may start in the middle of next June and Ginning operations may commence by the end of June month. Also in Punjab, on the pattern of last season, sowing of new crop cotton has already been completed in some parts of Central Punjab consisting of Sahiwal, Chichawatni, Brewala, Vehari areas, and its harvesting may start simultaneously with Sindh crop. However, regular cotton sowing is in progress and may continue till June month. There appears nothing new in inputs and pattern so next crop may not be very large.
This season (2008-09), cotton crop would finally finish around 11.4 million statistical bales of which 11,304,462 equivalent are reported to have reached the ginneries by 15th of this month. Local mills would consume all cotton except some 350,000 bales, which would be exported. To meet the shortfall of domestic requirements, around 2.0+ millions 170-Kg equivalent bales, of which around 1.4 millions have already landed Pakistan, are likely to be imported from different countries to meet the domestic requirements of some 13.5 million 170-Kg bales this season.
The latest cotton report indicates unsold stock of a trifle less than 1.0 million bales on 15th instant. Local exporters are estimated to be holding stock of about 50 thousand bales meant for shipments but most of the cotton may be sold locally in view unviable export conditions. Lint cotton prices in the local market have been depressed on low demand and only stray bargains are reported. The money market is so tight that reportedly ginners show willingness to reduce rates by Rs 100 to 150 if they get immediate payments. Most of the mills are running hand to mouth and have also reduced their working hours. On import front, high rate bargains are facing difficult situation while cheap rate bargains are getting priority in shipments.
Cotton prices on New York Cotton exchange were seen moving in very narrow margins. May,08 contract closed at 42.87 adding only 4 c/pts and December,09 contract finished at 48.10 adding 15 c/pts. Although, US has been quite lucky that its export commitments are very close to 10 million bales and are close to its export target of 11.5 million bales but some other prominent exporting countries like CIS, West African and Indian may be together holding unsold stocks of some more than 15 million 480-lb bales, US is slow in shipments which are around 70 percent of its export sales.
President Obama government is trying hard to bail out US economy and has taken some new measures; recently buying up to US $1.15 trillions treasuries, mortgage-backed securities and other debts prompting positive movements in many commodities specially energy and precious metal sectors. This step may help reduce sluggish trend in commodity, real estate and mortgage sectors. China is likely to achieve its cotton procurement target of 2.72 million tons = 12.5 million 480-lb bales in its Reserves by the end of this month and may go for some more amount of cotton.
However, this global economic and financial recession may continue till end of this year in US, EU countries and other developed countries but may extend to next year in developing countries. Pakistan has last week overcome one of its important problem of reinstating its deposed Chief Justice of its Supreme Court with its colleagues to their respective positions they held on 2nd. March,2007 but has to overcome other political and economic problems. Possible shortage of irrigation water and power may jeopardise our next crops of cotton, rice and sugarcane which very important for our economy.
Although, the spinning operation may be profitable for the mills at this low level of cotton prices but main problems in long-term business are tight liquidity, high interest rates, power shortage, costly crop in-puts, high rates of utility bills and poor political conditions. Marked improvement in economic and financial conditions may not be seen in near future and the ailing economy may be facing same or even harder conditions in coming months.
Here is a table of cotton performance in some of the important countries, which would give sufficient food for roughly assessing the present and near-future situation in cotton and textile sectors. This is based on US reports and many are of the opinion that still there is margin for reducing consumption and foreign trade figures. Some experts believe global cotton consumption may even go below production level.



===========================================================================
2008-09 WORLD COTTON SUPPLY & OFFTAKE Million 480-lbs Bales
===========================================================================
Beginning Ending
Stocks Production Imports Supply Mill use Exports Stocks
World 62.4 109.5 29.3 171.9 112.6 29.3 61.7
U.S. 10.0 13.0 0.0 23.1 3.9 11.5 7.7
China 20.0 36.5 6.5 63.0 47.0 0.1 18.4
Pakistan 4.5 9.2 2.8 16.4 11.5 0.4 4.5
India 7.4 23.0 0.5 30.8 17.2 3.5 10.1
Central Asia 2.6 7.4 0.1 10.0 1.7 4.7 3.7
Australia 0.5 1.4 0.0 1.9 0.1 1.2 0.7
Brazil 6.3 5.8 0.2 12.2 4.4 2.3 5.7
Indonesia 0.4 0.0 2.0 2.4 2.0 0.0 0.4
Mexico 0.9 0.6 1.3 2.8 1.9 0.2 0.8
Turkey 2.0 2.3 2.2 6.4 4.7 0.2 1.5
===========================================================================

Copyright Business Recorder, 2009

Comments

Comments are closed.