Unresolved yarn export issue, high prices keep cotton business under pressure

Modest buying was marked on the cotton due to high prices and yarn issue remaining unresolved. Besides, stocks with the sellers are just about two lakh bales, which will yield them good return. The spot rate opened at Rs 5450.
WORLD SCENARIO:
Mixed comments on the return of world economy thwarted since 2008 have not been coming. So cotton is being affected by fluctuating crops rise and fall in US currency, dollar.
The opening day cotton was impacted by the rise in equities and slipping dollar. The key May cotton ended 0.74 cent to 80.43 and July 81.64 cents a pound. Chinese currency, proven headache for the rest of the world power hope to budge for slightest - relief to them. The two holidays during the week are also to impact trading in cotton besides new crop planting estimates. Bulk of traders do not believe planting data at the end of the running week is not likely to impress or surprise growers and traders which are expecting, according to experts between 10.6 to 10.7 million intended acres. They expect 10.6 million produce will be price booster.
However, cotton sowing has been in the process as generally speaking soil and moisture condition are said to be nearly an ideal sort. In fact sowing has been nearly over elsewhere in the cotton growing areas, except of course knowledgeable circles Mississippi Della and to the south edge where cotton grower has breathing time to decide subject to however availability of certified seeds and necessary drugs. The week was marked by slow trading due to passover and Easter holidays despite planting report. However in coming day chances were boost in cotton prices and demand was expected to gradually pick up as tight reports about cotton production except Australia is rife. May contract on last trading day was 81.57 cents.
On Monday the NY cotton futures settled near the two-day highs hit, boosted by declines in the dollar and gains in oil and US equities, but volume was light and expected to stay that way for much of the holiday-shortened week. Benchmark May cotton closed 0.74 cent higher at 80.43 cents a lb, after trading between 79.74 and 80.85 cents. Volume in May was light at 5,748 lots, with total cotton futures volume around 11,000 lots.
On Tuesday the NY cotton futures closed lower, pressured by a rise in the dollar, but prices held above the recent range low as many players were on hold for the long-awaited USDA report on planting intentions. Benchmark May cotton contract finished 0.89 cent lower at 79.54 cents a lb. It traded down to 79.37, its lowest since Friday, from a 81.12 cent high. Volume in the May contract was a paltry 8,461 lots, with total cotton futures volume estimated at less than 11,000 lots. July cotton closed down 0.82 cent at 80.82 cents a lb. New-crop December lost 0.47 cent to end at 74.57.
On Wednesday the New York cotton futures maintained strong gains into the close, boosted by mill buying and dollar weakness, but position squaring heading into the end of the quarter made for the biggest advance. Benchmark May cotton contract settled 1.01 cent, or 1.27 percent, stronger at 80.55 cents a lb. It widened its range to the upside, reaching a high last seen on March 25 at 81.72. The session low was 79.50 cents a lb. Volume in the May contract was healthy at 15,931 lots. July cotton added 1.0 cent to finish at 81.82 cents. New-crop December ended 0.44 cent higher at 75.01.
On Thursday the New York cotton futures maintained strong gains into the close, boosted by mill buying and dollar weakness, but position squaring heading into the end of the quarter made for the biggest advance. Benchmark May cotton contract settled 1.01 cent, or 1.27 percent, stronger at 80.55 cents a lb. It widened its range to the upside, reaching a high last seen on March 25 at 81.72. The session low was 79.50 cents a lb. Volume in the May contract was healthy at 15,931 lots. July cotton added 1.0 cent to finish at 81.82 cents. New-crop December ended 0.44 cent higher at 75.01. On Friday the New York cotton market was closed due to Good Friday holiday and business will resume on Monday.
LOCAL TRADING:
On Monday modest trading was marked owing to quality lint and higher prices. The yarn issue remained nearly blocked resulting in small lifting and political volatility. However, spot rate opened unchanged at Rs 5450, phutti prices in Punjab and Sindh stayed at Rs 2100 and Rs 2200. In ready business 4000 bales of cotton changed hands in price range of Rs 5400 and Rs 5650 per maund.
A solo deal was marked on the second day of trading and was sold at Rs 5500, total number of bales being 1100. The sellers are least worried on stock position that would last before arrival of new cotton, sowing of which has started in Sindh and Punjab. The weather has been stated to be satisfactory and Irsa decision on share of water has proved to be satisfactory. The textile exporters were praying for permanent solution of yarn dispute, which gains to no one nor even the country's economy.
On Wednesday prices rose on the cotton market spot rate was also raised by Rs 25 to Rs 5475 per maund. Slight improvement was marked in trading and prices as millers appeared on the scene and lifted nearly 4000 bales of cotton to feed mills. The prices ranged between Rs 5200 and Rs 5500. Spot rate was unchanged and was quoted at Rs 5475. The sellers were pretty tough and hardly moved to relax prices. Since sowing had started and some weeks were still before new crop was available to the consumers. World cotton production was slightly improved according to report. In Pakistan there is clear announcement whether Bt cotton was being introduced to produce more to meet increased needs.
On Thursday mills came forward to cover the short position. The official spot rate was unchanged at Rs 5475. In the ready business over 4000 bales of cotton from different stations changed hands between Rs 5200 - Rs 5500. Market sources said that the mills were active and trying to meet their requirements within the psychological levels but the ginners were not ready to sell the unsold stock below the asking prices. On Friday nominal activity was seen as leading buyers were on the sideline in the absence of fresh leads. The official spot rate was unchanged at Rs 5475. In the ready business only 1000 bales of cotton changed hands as mills were buyer and seller, the deal was finalised at Rs 5500.
On Saturday official spot rate was unchanged at Rs 5475. In the ready business, only 800 bales of cotton from Ali Pur, were sold at Rs 5500.
CIVILIAN N-CORPORATION ALSO TALKED:
Pakistan textile manufacturers and exporters, faced with rising cost of production and declining exports had been expecting duty free access into the US market plus RoZs in suggested shape. But the two-day strategic talks ended without specifying date when to start.
The TV channels have been debating and discussing in a bid to fathom the outcome, they came down to lolly-pop. Many are straining mind to vision Zia's time when a triumphant super power rained on Pakistanis dollars for the mercenary fighters against Soviet Union. Besides, huge ordinary and sophisticated war machines were littered over the Pak territory. The dollars must have come in billions but where it was kept who knows as Pakistan still is facing shortfall water, power, industries and a viable economy.
The two day talks had greatly pumped businessmen and industrialists, but they are talking about shutdowns if government failed to supply life saving drugs for the units running somehow or are on the way out. Pakistanis are trying to digest such words as both countries have as a result of the talks, which Pakistanis had been taking for granted to the direction determining has come down. Both agreed to redouble their efforts to deal effectively with terrorism and work together for peace.
The most desired proposal regarding a civil nuclear agreement, similar to one signed by Bush administration with India. The report, say experts expressing the silence underlined the need for talks and possible more talks and though Pak leaders told journalists they delegation had very fruitful talks on civilian nuclear corporation.
GOOD NEWS INDEED!
The meeting of the Punjab Seed Council given approval for eight Bt cotton varieties and one hybrid variety for cultivation in Punjab whereas two Bt varieties have been for the time being deferred.
Before okaying the varieties, every variety was thoroughly discussed with breeders and then approval was extended, which the knowledgeable sources appreciated. Growers have been for long waiting for this cotton which is high yielding and pest resistant. In this country such kind of seeds have always been welcomed but the researchers have never succeeded in producing any so far.
The most of the drugs are supposed for spray to keep pest under control. Thus cotton growing was hard task and costlier also. The news was frequently coming Bt cotton was being introduced, but that proved a disappointment. Once or twice seed imported from neighbours were used but they hardly worked. The seeds were spurious and even worse than the cotton already grown in this country.
The need of the cotton is growing as textile exports have proved to be the backbone of the country and needed special care. In America where the Bt cotton was experimented and proved worthy has since been tried and proved gainful in China and India. India today claims to be a regular exporter. Only last season now coming to end weather caused shortfall but still India announced to export cotton. If the varieties okayed grow well will be mercy of Almighty.