Lint prices rise to Rs 3,625; spot rate increased to Rs 3,550 in aggressive buying

Rumours of varieties apart first ever five-year textile policy seems to have been working on market where cotton exporters and textile manufacturers and exporters took no respite and lifted available lots. Spot rate opened at Rs 3500, remained static till it was raised by Rs 50 to Rs 3550 on Friday.
INTERNATIONAL SCENE:
The noted cotton players, in pretty pessimistic tone say cotton today is not a leader but a follower. The more important, they are keeping an eye on data to be released by USDA of world's leading cotton consumers China and emerging major exporters-India, which is booming due to BT cotton harvest.
The cotton futures on the NYSE on the opening day turned higher evading past week sharp losses. Meanwhile cotton demand was expected to keep low, despite being 25-year low. Consumption on subsidies has been gaining ground, more particularly Brazil and China voicing for stricter WTO rules. Brazil advised by WTO how to hold US arbitrary penetration bid and preferred to talk out across the table with the trouble-shooters.
China's silence on cotton front its move how to fill the reported gap in its needs and stock in hand is worrisome for the US who are keenly watching India which has heavy stocks ready for any signal from China. The Fed Reserve chief's tact warning that global recovery is certainly evident but had reservation over pace of the same. However, the cotton futures will miss fundamentals depending on outside sources.
The impatient US wait of orders of imports from China has become further hazy. Government is trying to avoid unnecessary drainage of forex hence has offered mills 600,000 tons cotton avoiding to import from the US. China has released import quote but where the milk will turn for imports to US or India is vague.
On Thursday the NY cotton futures finished sharply lower on investor liquidation as a firm dollar and weak outside markets pressured fibre contracts. The December cotton contract declined 1.50 cents to finish at 61.34 cents per lb, trading from 60.99 to 62.81 cents. It was an inside day because it was within Wednesday's 60.65 to 63.08 cents band.
December contract volume reached 7,038 lots at 2:45 pm EDT (1845 GMT). March cotton fell 1.44 cents to end at 63.56 cents, dealing from 63.16 to 64.90 cents. On Friday New York cotton futures finished lower on follow-through investor liquidation, as the market seems poised to test key support at the bottom of its trading band.
The December cotton contract lost 0.68 cent to settle at 60.66 cents per lb, trading from 60.59 to 61.99 cents. December contract volume reached 6,703 lots at 2:40 pm EDT (1840 GMT). March cotton fell 0.45 cent to end at 63.11 cents, dealing from 62.92 to 64.22 cents.
Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said the market might see additional pressure next week due to the downturn in fibre contracts.
"Extreme moves on Friday don't just go anywhere," he said, pointing to previous sessions in the market when a sharp move failed to generate follow-through momentum the next day. Analysts said market participants would be watching closely if the December contract breaks below 60 cents in the days ahead.
"A close below 60 cents and certainly 58 cents will force specs to liquidate longs while adding to shorts but as the saying goes, 'let's take this one day at a time," said a report by Sharon Johnson, cotton expert at First Capitol Group in Atlanta, Georgia.
LOCAL TRADING:
Backed by handsome export prospect, both mills and cotton exporters fell on cotton market lifting available lots. The first ever five-year textile policy is being given great importance for cotton and textile products to get boost soon. The official spot rate was unchanged at Rs 3500 per maund. More or less 45,000 bales of cotton changed hands in prices range of Rs 3500 and Rs 3600 while in Sindh phutti prices were unchanged at RS 1700 and Rs 1725 in Punjab phutti got slight boost at Rs 1725 and Rs 1775.
On Tuesday second day's session there was no respite in buying spree. The textile policy is playing important role boosting exporters courage to avail the opportunity ahead. Nearly 38000 bales of cotton were sold between Rs 3525 and Rs 3600. Phutti prices stayed put in Sindh and Punjab. The buyers of cotton seemed to be enthusiastic about leadership efforts to get access into the US and EU.
On Wednesday 35,000 bales of quality cotton were lifted at prices between Rs 3525 and Rs 3600. The cotton buyers have become more interested in quality of the offered lint hence prices have firmed up. Interestingly lint from Sindh is being preferred and bought at dictated price. The monsoon rains the other day is said to have spoiled the quality of cotton. However, sales are dependent on quality of the lint.
On Thursday market turned stable while nearly 30,000 bales of cotton saw change of hands at RS 3530 and Rs 3600. The Sindh phutti was quoted put at Rs 1700 and Rs 1725 while that of Punjab was said to be ruling at Rs 1725 and Rs 1775. The reported damage to cotton crop is keeping sellers and buyers both almost at bay. However, some backing indicated in first five-year plan is prompting cotton exporters and manufacture and exporters of textile products are not tired of buying if they get quality lots. However, PCGA arrival report may depict truer picture of cotton health and damages.
On Friday after maintaining a firm trend for a long time, the official spot rate was raised by Rs 50 to Rs 3550. Nearly 36,000 bales changed hands between Rs 3575-3610. Phutti prices in Sindh were same at Rs 1700-1725 and in Punjab at Rs 1725-1775, they added.
Commenting on the continued panic buying by the mills, some cotton analysts said that the foresighted buyers were making future deals as the dollar is moving up in the local market. On Saturday activity came down on steady arrivals of phutti according to the Pakistan Cotton Ginners Association (PCGA) fortnightly report. The official spot rate was unchanged at Rs 3550. Transactions showed drastic cut as ginners raised asking prices despite the increase in the Phutti arrivals, approximately 20,000 bales changed hands between Rs 3590-3625. Phutti prices in Sindh fell by Rs 25 to Rs 1675-1700 and in Punjab, the rate were down by Rs 25-50 to Rs 1700-1725, they added.
PROBE LACK CAUSE DAMAGE:
How timely were two warnings pest and Cotton Leave Curt Virus (CLCV) had been located in parts of cotton growing areas never will come to knowledge. As for as growers are concerned, they cannot relax unless their efforts bear fruition. Thus, the Agri authorities and field workers are burdened with responsibility to cooperate until the harvest time. The relevant people know well that our God gifted cotton is downgraded and paid much less than it should.
The effort to remove drawback in cotton crop, if one is seen, has not succeeded so far. Who is responsible for improvement in the quality has not been probed. Probe lack has caused a lot of revenue loss has not been realised. In the first place, taking current attack on cotton crop by CLCV and damages as a result will never reveal who was behind the huge loss. The accountability process is unheard of in this country and any measure taken to punish the wrong doer is yet to create a history.
The warning was advanced had that taken care of had necessitated to report the situation was very alarming and indicated likely occurrence of a huge cotton crisis in the country as the pest had destroyed cotton crop (both) in Sindh and Punjab.
Every time such reports appear, not only of caution to growers but of huge damages, newspaper readers expect news to follow how effort were initiated and ultimately brought about immediate check. But against such nice expectation, reports appear how a huge loss had occurred. The report says: some 200 kms belt of cotton from Sadiqabad to Burewala area was attacked. In Sindh around five to 10 percent was damaged. The Bt cotton spurious seeds have been considered cause of.
TOWEL FACTORY ON FIRE:
Coming months are dangerous for textile factories and other units and the owner should take additional care to keep fire away. Raining time is almost to end, and dry weather is traditionally marked amenable to causing fire.
The fire at towel factory the other day located in the limits of Site police station is just the warning shot for factory owners. A report on Friday said that a towel making unit established on a plot No 141, Labour Square, Site around 6 pm was on fire, which was extinguished in five hours with only four percent of the area destroyed.
The entire report is based on the information of police and fire brigade. Since the owner's version was absent altogether, the extent of damage and reason of the fire could not be ascertained. However, as said above, all owners of factories should be over cautions so that they can save their factories from facing similar incident. According to sources not much damage has been caused understandably because of early and efficient handling. The fire brigade sources reported raw material (no mention of made-up product has been made) remain out of danger. If this can be taken on face value, towel makers must have been saved from being victim of further high cost which textile sector is making noise and say the reason in the decline of textile products, back bone of Pak economy. The five-year textile policy has encouraged considerably to the textile manufacturers and exporters who are making all out efforts to make up the recent losses.
TEXTILE SECTOR AS EVER:
The textile sector was looking at the likely windfall that the long visit of top-led team was to bring back. While the sector was worrying about this section which has been victim of high cost of doing business.
The Pakistanis, as a whole were concern laden over the Kerry-Lugar bill. The most major relevant people may be expressing concern how the top-led team will end with. But the concern was dimmed by presidential spokesman that Pak concern that attaching conditions to US aid will be counter- productive have been according to him accommodated in the Kerry-Lugar bill. He pointed out that the bill to triple US aid to Pakistan was approved by the US Senate. However, wait keeps on as all has not ended with Senate approval but it will go to the House of Representatives (that has already been done) after which Presidents Obama will peruse before signing.
The spokesman evaded pointation that the bill contained conditions that could hurt Pakistan. Their reservations regarding nuclear proliferation and project-wisw allocution directly were discounted by the spokesman.
However, the delay in clearance of Biden-Lugar bill that would have paved the way for reaching money reserved for RoZs (reconstruction opportunity zones) in under developed areas in the North West. The textile sector, all over Pakistan links itself with the RoZ, knowing well they will have upper hand due to wide variety of expertise at their command. But lot of noise was about development elsewhere but nothing came even in whispers about RoZs- life, which is over one year.
IS ANYBODY LISTENING?
How pleasant to hear, growers have opened mouth, in whispers though. In a report they lamented their voice was not heard in Islamabad. Strange! Founder Agri produce protection organisation said that cotton was sown on over six million acres of land in cotton growing districts of South Punjab this year, but CLCV attack, crop over a million acre was destroyed.
He alleged the irrigation Dept failed to irrigate the crop in September resultantly loss of more than 2.5 million bales sustained. The growers bodies expressed disgust over the alleged failure of Punjab Agri and irrigation for 25 percent loss of cotton production than the target of 10 million bales during 2009-2010 Kharif season.
In fact, they further alleged that the two departments caused loss of Rs 45 billion to the growers by not providing certified quality cottonseed.
Besides they said they did not release water in canals at an appropriate time for sowing and maturing of the country's biggest cash crop. Pak Agri forums chief, with heavy heart revealed Pak government had authorised more 100 seed companies to do business while India, a much bigger country had given permission to 32 seed companies to provide certificate and high quality seed to the farmers. He reminded under the seed pesticide act, the authorised companies are bound to employ at least two agriculture graduates to give scientific advice to the farmers, but he alleged few companies had complied with this legal requirement. He said that powerful seed mafia and so-called agri research bodies have played havoc with national economy!