Value added textiles manufacturers compelled to buy cotton at all-time high prices, spot rate at Rs 4,400

Without knowing for certain about the textile manufacturing, cotton and yarn exports were continuing in Pakistan much to the disgust of textile exporters who were buying cotton at Rs 4500 per maund. The spot rate was boosted to Rs 4,400.
INTERNATIONAL SCENARIO:
Cotton futures were fluctuating either ways but rising trend, ending though somewhat insignificantly stayed through the week. Pakistan is in news for contributing its lent to South Asian nations by exporting cotton despite haze created by interests of short crop yield and attack of pests. The Bt cotton tried earlier had failed but this season growers are optimistic. The Chinese government has for the second time in some weeks issued another 1.9 million tones of cotton import quotes shortly to hold in check shortfall and rising domestic prices.
In a ICAC report put import by China at 1.8 million tones. The countries addict to giving subsidies to growers are coming under WTO rule, which negates release to growers. The WTO is against any type of protectionism. But a deal contemplated for 2010 with nearly two dozens developing countries allowing easier access to their markets could not bring a deal close to. The distant onlookers saw WTO to be dismantled in digestible pieces. How funny. The gradual cut in cotton production has been shown at 30.4 million hectares or 75.1 million acres in 2009-10.
Meanwhile India is fast catching up the US in exports peaked at 400,000 bales, thanks to glories result given by Bt cotton. Pakistan is showing guts it can export cotton, may be with the contribution of Bt cotton, but interests make production ever far from clear. Australia has open offer to needy to approach its cotton in surplus. Anyway, March cotton hovered around 75 cents a pound towards the close of the week.
On Monday the NY cotton futures finished higher on investment fund buying tied to end of the month short-covering, as analysts mulled the next move in fibre contracts this week.
The benchmark March cotton contract increased 0.84 cent to finish at 74.68 cents per lb, moving from 73.88 to 74.84 cents. March contract volume reached 5,794 lots at 2:38 pm EST (1938 GMT).
On Tuesday the NY cotton futures finished lower on investor profit-taking as some players lightened their positions for the moment. The benchmark March cotton contract dropped 1.20 cents to finish at 73.48 cents per lb, moving from 73.45 to 74.96 cents. March contract volume reached 8,416 lots at 2:41 pm EST (1941 GMT).
On Wednesday, the NY cotton futures extended losses to finish lower on investor sales and worries over the economic slowdown as the market looked toward release of a pair of reports by the end of the week.
The key March cotton contract fell 1.15 cents to conclude at 45.83 cents per lb, trading from 45.75 to 46.96 cents. Volume traded in the March contract was at 13,556 lots at 2:56 pm EST (1956 GMT). The May contract lost 0.96 cent to end at 46.99 cents.
On Thursday the US cotton jumped about 1 percent, rising a second straight session, as speculators bought the fiber on expectations that the rally in some outside commodity markets could spill over into cotton.
The benchmark March cotton contract rose 0.67 cent to finish at 74.24 cents per lb, moving from 73.85 to 75.09 cents. On Friday N Y cotton futures fell 0.5 percent snapping a two-day rise, as a surprisingly better U.S jobs report raised fears of an interest rate hike that boosted the dollar and hammered commodities.
The benchmark March cotton contract fell 0.42 cent to settle at 73.82 cents a lb, moving from 75.03 to 73.65 cents.
It had risen a cumulative 0.7 percent in the two previous sessions on buying by speculators expecting the rally earlier in the week in commodities such as gold to spill over into cotton. The dollar jumped against other major currencies after data showed the United States lost just about 11,000 non-farm jobs last month versus a market forecast of 130,000.
Volume in the March contract reached 6,825 lots by 4:30 pm EST (2140 GMT), versus the 4,735 lots seen late on Thursday.
Open interest in cotton stood at 177,238 lots, as of December 3, from the prior count of 176,059 lots.
LOCAL TRADING:
The trading in cotton began only on Tuesday, when spot rate of cotton was up by Rs 50 to Rs 4175, despite business remained thin on the day, as traders were still in holiday mood, greeting and embracing one another. Only 4000 bales of cotton changed hands in price range of Rs 4200 and Rs 4300. The ruling prices discouraged buyers, restraining for a day or two to see whether change in prices were forthcoming. Phutti prices in Punjab Sindh ruled between Rs 2050 and Rs 2250 per maund. The market operators said prices were raised on whimsical ground, expecting post-Eid holiday buying will have same number of buyers witnessed in pre-holidays.
On Wednesday spot rate was raised further by Rs 75 to Rs 4250, while buying was seen. On Thursday prices touched all-time high in Pakistan, putting pressure on size of purchase - same came down to only 17,000 bales in price range of Rs 4275 and Rs 4500. However, overseas importers were firm in buying all Pak cotton, at prices determined by the ginners, market sources said. Meanwhile, Pak cotton ginners Association released its fortnightly report up to November 30, 2009. It showed ginners received nearly 10.4 million bales. Besides exports, local buyers are also showing no respite causing prices to rise despite approach to authorities to rationalise rate who so far have as some body to monitor the exports of cotton and yarn.
On Friday prices held the overnight levels in the ready business amid improved activity and approximately 24,000 bales of cotton changed hands between Rs 4250-4500. Phutti prices in Sindh and Punjab were same at Rs 2100-2300.
On Saturday official spot rate was unchanged at Rs 4,400. In the ready business approximately 20,000 bales of cotton changed hands between Rs 4300-4500. Phutti prices in Sindh and Punjab were same at Rs 2100-2300.
"OUR WORLD IS NOT FOR SALE"
Whoever said above has perhaps gone into the inner feeling of those who are more concerned about their constituencies and are afraid of losing votes. The WTO lingering since the last nice years can hardly be of any interest for such people. What, however, is interesting that some such great people of great countries have been original thinkers who wanted to share their wealth with the poor bereft of real meal with their kith and kin since this planet probably came into being.
But some of them like a real good businessman think quite a bit differently, as why should share their wealth on equal footing and not reap from accumulated wealth and technologies. The result has been that about a decade lapsed on futile conference and talks. And, according to international Food Policy Research Institute, sharp swings in commodities and staple food markets were not factored into the original Doha agenda. Climate change is treaded only on the margins of the talks, which focus on cutting tariffs and subsidies on traded goods like the cars and meat.
How many of the 153 member countries are sure the deal will be struck by 2010. And will not there be many more changes in the world, thinking, trade and plight of the poor. Since the idea was to better the life of poor, change in the life of poor has not taken place and they still need help from the rich and people who will remain rich.
The countries have been divided into three broader kind - poorest, developing and developed ones. This is and was designed to delay in reaching a deal - today Brazil, China and India are on the way to turn into developed countries - countries in other parts struggling to survive, as a free one - but in all likelihood, if countries look at others to contribute for one or the other reason and delay lengthens some more invisible changes will come up making a deal a play thing - and!.-
Unnecessary Row Revisits:
Had there been conscious feeling how best to help the sluggish Pak economy row between two definite contributors to economy would have not re-emerged. The mistaken people or perhaps under pressure of some sort of such machines were "contributed" or "imported" some two decades back when fragile economy needed "oxygen" was allowed by authorities with little knowledge what they were doing.
The few manufacturers, who held nerves, for they were endangered by their raw material, yarn, lack of its availability would try to feed the authorities that yarn exported went to Pak exporters' competitors. But time was not with them. However, this season, owing to non-availability of cotton or at higher prices, the cotton and yarn exporters turned to Pakistan, which once again pressed to voice against yarn exports, already faced with high cost of doing business.
The authorities who are unaware of the intricacies listened to value-added sector's call for banning exports of cotton and yarn. For reasons perhaps not known why this sector was and is put under free trade - allowing both the cotton consumers to import cotton and yarn spinners to export cotton. The value-added sector objected to unbridle exports of yarn, which authorities listened partially, as they were aware of the set trade rule.
The row has once again raised its head after remaining dormant for a decade or so. The yarn exporters are claiming higher prices from sale, while accusing local consumers of calling for lowering the yarn prices. Both have reservation against the newly set up textile ministry. The coming days will show how things are made smooth for yarn makers and yarn users!
FREE MARKET MECHANISM:
Free market mechanism, favourite of all developed countries. In developing countries where discipline rules and economy concern is on top, creates no visible problem. Now the term is used in Pakistan linked with spinning and textile sector. The history how it must have been re-inducted is presumably not long - it was during Dr Mahbobul Haq's time, who had taught S Korean the trick of the trade to apply in case of Pakistan too.
The method was very gainful there. But the great economics failed to push his ideas to all switch over to value-addition. How much he was hurdled - in fact he had to go for championing the cause of manufacturers of made-up products.
It was this time, in short, somehow, introduced to check the unbridled exports of yarn at the behest of made-up exporters who faced then tough competition with the Pak exported yarn to foreign countries. The competition which actually made Pak exporters lose edge had left no alternative to import cotton. it consumers desired and spinners exported yarn in any side and any price it suited them. Thus exports and imports have been free for all-dragging any one to heed that it was need to care also about the economy and the country besides individual interests. The current without check exports of yarn is the chain of that old practice, which has put value added sector to look for quarter who can help. All exporters without intimated recourses are faced with high cost of doing business, added being according to exporters cotton and yarn jumping rate. The X'mas occasion play very important part in the year but the high cost of every thing is making exporters afraid whether orders are going to be cancelled?
PROTEST PRECEDES MEETING:
How the shape at the time of likely deal in TWO be, is getting all the more uncertain. The opponents' protesters expose their anger by throwing stones at the decoration pieces like shops in fashionable Sweden capital close to venue of. May all important meeting, next week - Monday, through Wednesday. In total number of 153 WTO members, according to reports in a recent meeting negotiations from countries including Argentina, Brazil, India, Indonesia, Egypt and S. Korea on Wednesday (November 26, 2009) agreed on an agreement to be submitted to the members for approval.
A diplomat attending the meeting disclosed. Strangely, the agreement will only affect trade among 22 countries and again, more surprisingly, is not connected to the broader Doha round of negotiations that aim for a global reduction in trade barriers.
The text is likely to be discussed on November 30, diplomats cut at least 20 percent in tariff. On 70 percent of all products, the diplomat said, adding that countries will determine in the final list of products next week to go through the text but the meeting should not take long added the diplomat. The WTO deal long over due has seen many ups and downs never looking it was being guided to a safe landing, inviting protests and demand that global trading should either be delivering what poor has been missing since centuries or let go it on way today. The way the powers are dragging it to nowhere all exercise to equitable level is unlikely to end on positive note. By the time this review will be in print the development related to WTO will be more visible. Let it so be.