Prices in ready, spot rate move up in buying spree on cotton market on better prospects

The cotton prices reached almost near record at Rs 3,600 on Thursday, though reports about damage to crop was not clear. However, phutti rate under went some changes while rates in ready off take were higher during the week. On the last working day of the week official spot rate was raised by Rs 25 to Rs 3,475.
INTERNATIONAL SCENE:
The early trading in cotton was influenced by short covering leading to rise in prices. It was, however, apprehended that China's dispute over tire may prove a setback China needs US cotton but reservation over dispute, filed with WTO was likely to slow down US exports.
The apprehension was deepened particularly by enough cotton surplus with India, supported by Bt cotton. In the absence of strong fundamentals outside sources like dollar's rise and fall, oil, share markets, grain markets offered support to cotton to inch upward. Any apprehension regarding any set back in trading is worry of the players. The good expectation about global recovery, particularly prospects in US retail sales affected cotton trading for the better.
The beginning of the week showed pace in cotton the other way, but towards the mid-week Wall Street and commodities boost pushed futures higher. At one stage the rise was actually peak as compared to past month ruling trend. Cotton players watching fast developing situation came out with expression that, God forbid, futures take reverse turn, but the global recovery outlook exposed by developments in commodities, and grains the cotton market players took relief sigh.
On Thursday the NY cotton futures rose for the third consecutive session, hitting a one-month high on a day when most other commodities fell, with buyers expecting the fibre to benefit from a rebounding economy.
The December cotton contract in New York gained 0.66 cent, or about 1 percent, to finish at 64.18 cents per lb. It hit a session peak of 63.96 - its highest since August 14. March cotton closed up 0.7 cent at 66.19 cents a lb.
On Friday, the NY cotton futures closed with moderate increases, just off the five-week high set earlier in the day, as speculators continued to seek the fiber following a raft of strong US economic news this week suggesting demand might pick up down the road, analysts said.
The December cotton contract in New York ended with a gain of 0.42 cent at 64.60 cents per lb. It hit a session high of 64.74 - its highest since August. 13.
LOCAL TRADING:
The cotton buying activity got stepped up during the week owing primarily to both millers and exporters were in need, but, the transport non-availability before and immediately after Eid was also in view. The spot rate stayed put at Rs 3,450, phutti too was unchanged in Sindh and Punjab: in Sindh around Rs 1700/1725 and Rs 1725/1750 in Punjab. Nearly 12000 bales of cotton were lifted both by millers and cotton exporters, in price range of Rs 3440 and Rs 3575. The stepped up buying exposed the exporters of textile had linked their efforts with good that five years textile policy was likely to offer.
On Tuesday hectic buying before holidays was marked on the cotton market as sources said millers bought cotton in anticipation of significant increase in exports following historic five year textile policy. In Sindh phutti prices were lower at Rs 1680-1700 while in Punjab phutti prices were unchanged at Rs 1725-1750. The cotton exporters were in the market hoping to gain from likely order from China and in hand or less from Bangladesh. Some 18000 bales of cotton changed hands in price range of Rs 3450 and Rs 3600.
On Wednesday over 12,000 bales of cotton changed hand in price range of Rs 3450 and Rs 3575, in Sindh phutti was firm at Rs 1680 and Rs 1700 and in Punjab. Rs 1725 and Rs 1750, the spot rate was at Rs 3450. The buyers were collecting as many quality bales as they could before Eid holidays while sources said cotton sellers were taking advantage of buyers chance and selling at whimsical rate.
On Thursday stepped up buying led to price like peak reaching at Rs 3600 though spot rate was maintained at Rs 3450.
Over 11,000 bales of cotton were sold in price range of Rs 3450 and Rs 3600, much above spot rate, phutti stayed put in Sindh at Rs 1680 an Rs 1700 while in Punjab it was selling at Rs 1725 and Rs 1750. The rise is linked to cotton damage in Punjab which however nobody is sure where damage took place and the quantum loss. The stepped up buying seems textile exporters have seen something favourable coming through five year textile policy. This Eid eve has brought cotton buyers to market regularly offering hope exports were likely at higher pace.
On Friday no change was seen in the pace of the mills buying activity on cotton market. Approximately 13,000 bales changed hands between Rs 3465-3575. KCA official spot rate was unchanged at Rs 3450. Phutti prices in Sindh were same at Rs 1680-1700 and in Punjab, the rates were at Rs 1725-1750.Some brokers said that speculative buying was again seen amid rising apprehensions about the supply of cotton after Eid-ul-Fitr holidays.
On Saturday prices went up on due to short supply ahead of Eid-ul-Fitr holidays. The official spot rate was higher by Rs 25 to Rs 3475, they said. Activity slackened due to Eid holidays and above 3000 bales changed hands between Rs 3475-3600. Phutti prices in Sindh were same at Rs 1680-1700 and in Punjab, the rates went up at Rs 1725-1800. Some cotton analysts said that the local and global factors pushed the rates up and it is most likely that the prices show firmness due to tight supplies in the coming days.
JACQUARD LOOM MOURNED:
Very few people mourn, when they have, or can have a better alternative before them. But Dariusz Makowski, owner of jacquard work shop, in fact cried when he spoke to a leading news agency beginning with the sound system produced - "chekety clack" right back in 19th century.
Mowski tried to save the fabric workshop he ran but found the situation very difficult and was certain it was a matter of just a few weeks. The loom in our part was also popular and "Julahe" were expert in weaving "Khadi" and the sound the structure produced was known "Thak nari Thak" "Thak nari Thak". Mokowski came under economic pressure the world is faced with and was too pessimistic subsidy from public could be found. Invented by Frenchman Ioseph Marie Jacquard in French city of Lyon around 1800, being the first loom to weave complicated patterns. The mourner said it revolutionised textile manufacturing and paved the way for mechanised modern textile industry.
Makowski recalled proudly Jacquard technique spread across Europe in 1800 and by 1840 large manufacturing facilities weaving Jacquard fabrics and rare laces were set up in Poland. But soon machine operated Jacquard looms replaced their hand operated ancestors. How different is loom weaving in Faisalabad, but the owners of the loom workshops are waging struggle to go side by side the modern textile machinery. But they are not talking how long they will successfully continue to face machines.
CABINET MAY FIX PHUTTI RATE:
Cotton will be soon honoured, as federal capital is expected to fix seed-cotton intervention price likely to help growers with return that will satisfy them. The level is likely to be respected by the ginners.
The normal practice was that food and agri minister would submit a summary to economic co-ordination committee, which however was withdrawn to be informed federal cabinet will do the needful. As per summary minfa the cabinet was expected to fix seedcotton intervention price at Rs 1,500 per 40 Kgs with staple length 1 1/32 during 2009-10. The minfa chief had endorsed phutti rate at above level.
The target fixed last year at 12.1 million bales from the cultivated area of 3.20 million hectares (48pc higher than last year's) with average yield of 737 Kgs per hectare.
The practice is pretty old for fixing intervention price but had always been clearly violated, last year was no exception. Last year phutti fixed at Rs 1900 was brought down as low as Rs 1,300 per 40 kg at some places. Once rate is fixed, it is a matter between growers and ginners, where former, a friendless section, turns out to be a sure victim. They often had protested as such in the past. The result authorities see with open eye that cotton producers are losing interest and target almost always remains unachievable. Not only in Pakistan in Africa and even American cotton growers are turning to other grain ensuring better return.
The TCP is always directed by government to make its presence with its cotton stock to balance price so that sellers get good return. But growers have been gradually turning to crops ensure them better money. Something more practical is needed to allure growers to stay away form cotton growing.
TEX INDUSTRY URGED:
The stopped up buying on cotton market is encouraging as that makes authorities believe the manufacturers and exporters of textile products are avengeful and are bent to regain what in last few months they have lost on account of high cost of doing business.
It's their old practice to deny any benefit coming from government side. The practice seems to shortly die out which things turn gradually favourable. The opportunities they were passed on some years back have gone out of reach of the government earlier they realise better for them.
The first five-year textile policy, which expects exports target to top at $25 billion can very well be considered achievable. The policy if a look is given at the people who surround textile ministry and who were sought to attend and in fact attended were themselves stakeholders in the industry.
They had through been in the bodies and meetings that shaped the textile policy. Thus federal textile advisor Iftikhar Baig is right is urging textile industry to utilise its potential after the government has issued relevant SROs and notifications. No doubt, hard cores have cast a critical look at the earlier reports saying government had done its best and if properly regarded and utilised the government effort put textile industry on track will be rewarded amply. And old days of approaching banks for loans and failing to pay back, according to sources close to industry will be lost in the darkness of the past.
The five-year policy is worthy of giving a trial and continue to travel ahead from strength to strength without begging from banks, and leading textile importers of the world.
PEST SCOUTING ADVISED:
Twice a week pest scouting has been advised as attack of army worm on cotton is seen spreading in some areas of the Punjab to hold large scale attack in check before damage caused to the crop.
The sources close to cotton and textiles noted that the advice should be by some authority of the agri dept. Besides more practical help should reach the farmers to be firm that risk has been averted.
This report is clear on the issue saying the advice is for the second time. It was not clear whether earlier advice was not heeded and damage chances had increased. The areas should have been specified, as, under the advice farmers were supposed to sweep through each plant and leaves to ensure proper end to the weeds (army worm).
The report said that farmers should be aware that army worm attack on crop in shape of groups and lay eggs beneath the leaves in clusters. The eggs, report says are caught by naked eye without much difficulty. The farmers can pluck diseased leaves and destroy the eggs containing small army worm.
The recent rains have indicative that might have given birth which play hosts to army worm being highly harmful. Farmers as against this, according to reports had expressed the rains had given ground to boost crop and production. Anyway, scouting twice a week or more keeping a careful eye on the growing cotton plant is always beneficial. Not long before chance of CLCV spreading was also reported, giving rise to cotton stocks with the sellers.