Marginal consumers' interest, short supply and rains interruption impact cotton prices fluctuation

Tight supplies and marginal interest shown by consumers impacted fluctuation during the week, which was marred by rains and floods. The spot rate opened higher by Rs 150 to Rs 6000 and after being raised by Rs 100 twice was at Rs 6200 on July 31 2010, last day of the week.
WORLD SCENARIO:
The cotton futures have been moving up and down with reports that cotton sowing has already been completed while supplies in some countries have also started. The price fluctuation is said to be mostly technical or impacted by outside markets. The cotton players were sensitive about global recession believing only half way what the renowned economists said. The optimistic cotton production in Australia, the USA, Brazil and India has been maintained. The oil world has, as a consequence seen global cottonseed production to a three-year high of 44.2. The US plans to use cottonseed in animal feed, particularly for dairy cattle.
Pakistan is expecting 14 million bales if frequent warning to tackle viral attacks if crop was to be saved from damage.
Meanwhile cabinet body in Pakistan stopped 15 percent RD on yarn exports. Will it offer lasting solution seems unlikely? India has been reporting satisfactory cotton production duly supplemented by Bt cotton. Obama's huge move against Wall Street continues to receive scathing remarks by people earning above $ 250,000, the rich. Obama and party is happy taking for granted it will hugely cut budget deficit and in the long run will stand in good stead by the low paid consumers. The week opening session saw gains in cotton futures - December rose by 0.60 to 76.91 cents a pound.
On Monday the NY cotton futures closed at a fresh two-week top on follow-through buying as the market successfully raced past key technical barriers and the momentum may push values higher this week. The December cotton contract increased 1.15 cents or by 1.52 percent to end at 76.49 cents per lb, moving from 75.34 to 76.53 cents. It was the loftiest close for the second-position contract since July 8. The spot October cotton contract gained 0.90 cent to finish at 81.22 cents. October enjoys a 4.73-cent premium over key December, from the previous session's premium of 4.98 cents. Volume traded in the December contract stood at 14,592 lots.
On Tuesday the contract ended at 76.70 cents in the highest close for the second position contract since July 8. The spot October cotton contract fell 0.88 cent to finish at 80.57 cents. October has a 4.26 cents premium over key December, down from the previous session's premium of 4.75 cents. Volume traded in the December contract stood at 8,724 lots.
On Wednesday the NY cotton futures finished easier on profit taking after climbing previously to a three-week top with the market still facing the prospect of tight deliverable supplies, brokers said. The December cotton contract shed 0.39 cent to close at 76.31 cents per lb, dealing from 76.11 to 77.29 cents.
On Thursday the NY cotton futures ended higher on modest investor buying on a weaker dollar as the market again kept an eye on tight deliverable supplies in the spot October contract. The December cotton contract rose 0.60 cent to close at 76.91 cents per lb, dealing from 76.25 to 77.44 cents. It was the highest close for the second position contract since July 8. Spot October added 0.11 cent to finish at 80.68 cents. October has a 3.77-cent premium over key December, down from the previous session's premium of 4.26 cents. Volume traded in the December contract stood at 7,954 lots.
On Friday the NY cotton futures finished at a month high on technically inspired buying and the momentum from the advance may spill over into trading next week. The December cotton contract climbed 1.85 cents, or by 2.40 percent, to close at 78.76 cents per lb, dealing from 76.68 to 78.94 cents. It was the highest close for the second position contract since July 1, according to Thomson Reuters data. On the week, the contract was up 4.54 percent and gained 3.11 percent on the month. The spot October cotton contract added 1.68 cents or by 2.08 percent to finish at 82.36 cents. October has a 3.60 cents premium over key December, down from the previous session's premium of 3.77 cents. Volume traded in the December contract stood at 15,402 lots.
LOCAL TRADING
Rains and floods impacted cotton trading while Shab-e-Baraat also intervened during the week. However, tight supply aided spot rate rise by uneven stretch by Rs 150 to Rs 6000. The needy consumers lifted 5400 bales in price ranging between Rs 5850 and Rs 6,200. Phutti in Sindh sold at Rs 2600 and Rs 2650 while in Punjab it ruled at Rs 2700 and Rs 2750.
On Tuesday, it was expected RD removal will end uncertainty. It was seen as sales were up by 8000 bales in price ranging Rs 5800 to Rs 6200. Phutti in Sindh was selling at Rs 2650 and Rs 2700 while in Punjab it was marked at Rs 2750 and Rs 2800.
On Wednesday spot rate was again raised by Rs 100 to Rs 6100. Sales were marked around 3000 bales of cotton in price range of Rs 6200 and Rs 6300. Phutti prices in Sindh were marked at Rs 2600 while in Punjab raised by Rs 50 and marked at Rs 2850. The market sources avoided to answer whether duty removal was permanent solution but advised to wait the reaction from the other side.
On Thursday spot rate for the second day in a row was raised by Rs 100 to Rs 6200. In the ready business, only 1,600 bales of cotton changed hands between Rs 6000-6400. Phutti prices in Sindh were at Rs 2650-2700 and in Punjab, the rates were at Rs 2800-2900.
On Friday spot rate was left unchanged at Rs 6200, they said. In the ready business nearly 7000 bales of cotton changed hands between Rs 6000-6400. Phutti prices in Sindh shed Rs 50 were at Rs 2600-2650 and in Punjab, the rates were at Rs 2750-2850.
On Saturday spot rate was unchanged at Rs 6200. In the ready business nearly 5,600 bales of cotton changed hands between Rs 6000-6350. Hopes of rise in phuitti arrivals pushed the prices lower as rates in Sindh were at Rs 2500-2550 and in Punjab at Rs 2700-2800
TEXTILE INDUSTRY'S VITAL ROLE, BUT
The agriculture is vital for sagging Pak economy has been agreed by all. Similarly the importance of cotton and textile products cannot be over emphasised. The textile products are top performers in forex earning if taken singly. How the textile sectors should be nursed for doubling and trebling seems nobody's business.
Or, the way knowledgeable circles signify it is lack of even basic knowledge on the part of authorities who are favoured with such important sector like exports, commerce and finance. The worse is seen when one favoured is thrown out to make room for some other equally ignorant. The moment one speaks about agriculture one takes for granted wheat and rice etc No, it actually covers land, fertile land, abundant irrigation water availability, in required quantity, ploughing the field nicely, weed out mushrooms from field which needs continued watch, wide variety of diseases and proper drugs to be made available to growers at reasonable rate. Growers are not educated. Those who are well versed with agriculture and its products give twice and even in some case thrice annually.
The result is that agri or textile sector confront even minor problem there is hardly any solution. For one lurking problem the cabinet committee on Monday was weighing steps to resolve the dispute between the value-added and spinning sectors over the lapse of 15 percent RD on yarn export. The president Rawalpindi Chamber of Commerce and Industry Kashif Shabbir called government to take steps to revive textile industry by extending special incentives. As far as suggestion it was taken for granted text for an answer cabinet committee decision will have to be waited and will that be lasting?
HOW NAÏVE TO PROTEST!
The Union of Soviet Socialist Republics (USSR) booming when India was divided and Pakistan was created over six decades back. That country running parallel to the US and Europe, looked, rather stretched hands of friendship towards Pakistan. But Pakistan bowed its head to give a stretch to India, already in Soviet camp, followed by delivery of proverbial delivery of needle to engine with technology and wherewithal.
Pakistan was left no alternative than to hold the shaky hands of remaining countries flourishing then. The so-called Western countries are still apprehensive of things a creation of their own. The USSR before bruised and pulverised into history made India strong enough enabling it to talk with strength.
The Europe, now European Union, with strength to reckon with, offered India to sign free trade agreement as back as 2007, India responding then to wait for a ripe time. May be right time has come injecting concern in Pakistan, front ranking ally in efforts by powers. How qualified this concern is can be gauged from the fact that Pakistan has been allowed to compete in these countries with quality and competitive prices. Even GSP-plus has been flatly refused and for how long the limit has not been even communicated.
The report, the latest one flashed by a leading agency saying the two representatives of the countries will meet and finalise a deal by, perhaps a final deal before the end of 2010. Expressing concern, Pakistan knows carried no sense - Pakistan should know, according to circles close to trade and exports. India has lots to give Pakistan cannot. One is constrained to mention Iran's muscle it has volleyed in the air in such lucid words, "Iran won't trade with countries imposing sanctions".
IDENTIFY PROBLEMS, YES!
Making postures as we are used to and even shouting at the top of voice without communicating your message to proper quarters is sheer waste of time. One feels sorry to point out main textile sectors have been doing since they are in business or exports. The most prosperous of the lot and knowledgeable look for viable place how to make quick harvest and wasting time on locating loophole of others. In fact a businessman or exporter should value its time unlike men in streets.
Great responsibility lies on them to keep economy of the country and prosperity without any dent. They have to even successfully cover up hard to locate faults of politicians which unwittingly end up in looking for some donors. Thanks God, after months of frequent get-together to settle issue that pinched cotton yearn exporters and manufacturers and exporters of value-added products which always ended into a painful failure.
Even today both have eyes set on 15 percent regulatory duty or otherwise on yarn exports. However, out of textile arena, member customs Munir Qureshi urged the value-added textile exporters to identify problems hampering their working. His advice hinged on exporters should hold meetings with concerned officials of Customs to find an immediate and permanent solution to their problems.
The issue was a bit different from what has prevailed for years but that is the way to find out solution. So what if the yarn exporters have to sit across the table with value-added sector. An issue is issue and should be threshed out before need of outside help is required. It is hoped the problems value-added sector is faced with is resolved before this write up is in print.
IT'S TIME TO PONDER
How long allegations and counter allegations will soothe sectors with somewhat varied interest? These have been tried since this country was created, and, when country's bigger slice was no more with us all in this part had decided to observe extreme caution. But where is that.
Had caution been observed, the remaining part would not have lived afloat on donors' money. How strange one often hears that donors recipients take pride for the charity. Their argument is that donors at least consider that worth-agriculture is full of potential and considered backbone of our economy. No wonder that 2009-10 year has hit the export target said to be over $19.38 billion. The reason could be attributed to export earning of rice, which proved maximum this season, textile products added to it beside agricultural products have saved billions as country was spared from imports. The time invites Pak manufacturers and exporters how they deduce things should be if there would be ethical values ruling the spinners and manufacturers and exporters of textile products?, knowledgeable circles asked.
The peak achieved this season in exports could be double as the value-added products' exporters had been assuring the authorities provided they were not short of yarn and yarn should have been available at cheaper rate. So that textile products and made-ups could have enjoyed an edge over India, China, Bangladesh etc The pious wish is still reachable provided allegations and counter allegations are avoided at every step.