KCA official spot rate slashed by Rs 250 to Rs 6,300; mills continue to lift lint in moderate quantity

End of the week saw huge spot rate crashing as seed cotton arrivals gained pace as was the cotton in ready easy attractive for buyers. The spot rate spilled into week at Rs 6550 per maund, while it was marked on Thursday down at Rs 6300 per maund and continued till the closure of the week.
WORLD SCENARIO:
The cotton futures in the past week scored with benchmark December keeping over 80 cents and above, higher than gainers of crops and metals. Major players holding the view that market was over sold inviting investors to try luck. The futures fluctuated both ways but strength was apparent. The world economic recession has prompted reserve. Chief to somehow beef up which has partly made positive effect on markets.
America has been fattest cotton producer and hopes to meet increased Chinese requirement, which China is planning to be replaced it is marketing the preserved stocks. The authorities in China are alert and as a precautionary steps buying to keep prices in check internally.
In Pakistan where floods had caused considerable damage to cotton crop hope to appeal the surplus US to fill the gap floods created. Around two million bales are in view to be received. So far nothing is clear, however, Australia has been reporting to produce during 2010-11 around 34 percent higher than the immediate past year. In figure terms the US will produce 520,000 tonnes. Australia is surplus around 80 percent, which it exports. India is given to have been expecting cotton production around 33 million bales.
On Monday the NY cotton futures rumbled to its highest close in over two years on a fresh round of speculative fund buying but some analysts are getting worried the market is massively overbought and fiber contracts would need to correct lower soon. ICE Futures US benchmark December cotton contract gained 0.36 cent to finish at 86.43 cents per lb, the highest settlement close for the second position cotton contract since early March 2008. The contract traded from 85.75 to 86.85 cents, which is below the Friday top of 87.30 cents. The volume traded in the market on Monday was very light though. Total cotton contracts traded stood at 5,885 lots. Some 61.28 percent below the 30-day average of 15,199 lots, according to preliminary Thomson Reuters data.
On Tuesday the NY cotton futures closed easier after charging to a fresh two-year top as the market was hit by some profit taking and investors wondered if a correction was imminent after the rally. ICE Futures US benchmark December cotton contract eased 0.23 cent to finish at 86.20 cents per lb. The contract traded from 86.13 to 87.71 cents, the highest level for the second position contract since March 2008. On Wednesday the NY cotton futures finished at its highest level in 2-1/2 years on all-around buying by investors, which scupper ideas that a correction to the rally in fibre contracts may happen soon.
ICE Futures US benchmark December cotton contract rose 1.21 cents to finish at 87.41 cents per lb. It was the highest settlement close for cotton's second position contract since early March 2008. The contract traded from 86.01 to 87.90 cents, also the highest intra-day level for the second position contract since March 2008. Total cotton contracts traded stood at 10,631 lots, below the 30-day average of 14,977 lots, according to preliminary Thomson Reuters data.
On Thursday the NY cotton futures closed at another 2-1/2 year high on investment fund buying and tight supplies, as several players bet on higher values while some fretted that a correction may deflate the rally soon. ICE Futures US benchmark December cotton contract increased 2.08 cents, or 2.37 percent, to finish at 89.49 cents per lb. It was the highest settlement close for cotton's second position contract since early March 2008.
On Friday the NY cotton futures posted slight losses to finish lower on investor profit-taking but dealings were light and most players were waiting to see if the market would rally further after a holiday weekend, analysts said. The cotton market is shut on Monday for Labour Day. Trading resumes on Tuesday. ICE Futures US benchmark December cotton contract eased 0.04 cent to finish at 89.45 cents per lb.
The contract traded from 88.59 to 89.95 cents. The loftiest intra-day level for the second position contract since March 2008. Total cotton contracts traded stood at 10,696 lots at 2:37 p.m. EDT (1837 GMT), below the 30-day average of 14,723 lots, according to preliminary Thomson Reuters data.
LOCAL TRADING:
Prices stayed firm on the cotton market as mills continued to buy as market operators expected values will rise rather than come down. As a result of the positive attitude some 11000 bales of cotton was lifted on Monday in the price range of Rs 6500 and Rs 6800. The official spot rate as also raised by Rs 100 to Rs 6550, while phutti in Sindh was selling at Rs 2900 and Rs 3000, in Punjab price did not fluctuate and was quoted at Rs 3000 and Rs 3200.
Pakistan is in urgent need of imports from India and other countries due to damage at home.
On Tuesday good quantity of cotton was lifted that around 12000 bales in price range of Rs 6550 and Rs 6850. On Wednesday spot rate was pulled down for the second day sequel to speedy phutti arrival. Rates in ready also plummeted. The official spot rate was slashed by Rs200 to Rs6300. In ready too prices eased, which prompted consumers to buy another 11000 bales in price range of Rs 6100 and Rs 6400. The seed cotton prices were nearly steady in Sindh and Punjab as sellers were in double mind whether to sell from ready stocks. The quality cotton, which could later fetch better return. But they also harbour apprehension if arrivals continue and the damage estimate proved much higher than actual. The buyers were also aware that staring into them is Eid-ul-Fitr in a week' time. Generally transactions immediately after holidays are a cumbersome job. However, consumers activity is encouraging calling for orders in hand for exports.
On Friday official spot rate was kept unchanged at Rs 6,300. In the ready business nearly 6,000 bales of cotton changed hands between Rs 6200-6550. Seed cotton prices in Sindh were at Rs 2800-2900 and in Punjab at Rs 2800-3000. On Saturday official spot rate was unchanged at Rs 6,300. In the ready business nearly 11,000 bales of cotton changed hands between Rs 6450-6600. Seed cotton prices in Sindh were at Rs 2950-3000 and in Punjab at Rs 2800-3000 said. Fresh rains in the cotton belt propelled the mills to make new purchasing, which helped prices to maintain firmness.
GSP PLUS STATUS FOR 10 YEARS AND WITHOUT DELAY:
Under very pressing conditions Pakistan is tightening belt to make serious efforts for GSP plus status. It is expected foreign minister will take up the matter in the EU meeting scheduled in the second week of September 2010. The unprecedented havoc caused by recent floods and deluge, which destroyed crops, houses, infrastructure and will need huge amount to rebuild in not weeks, months but years. The UN and World powers and agencies are alive to the situation and whatever is possible is being urged who can help build the Pak economy to stand on firm foot as early as possible.
Therefore the govt has but to give a clarion call to all specially friends to come forward in dire circumstances to reduce the misery of the people of Pakistan to overcome these challenges. The report speaking about the tremendous efforts ahead even at this horrible time this flooding is much more than the combined damage caused by Tsunami in 2004, the earth quake in Pakistan in 2005 and Haitian earthquake of 2010.
The minister explained that it was wrong perception that enhanced market access will affect in domestic industry and jobs. As textile industry in Europe is mainly high end of technical textiles, while Pakistan exports are not in that field. What Pakistan is struggling for is to regain her potential share from some of her competitors in the EU markets and help rehabilitate her economy and infrastructure. If the US hearing this call to EU it will be welcome that process is expedited to extend faculty to start opportunity zones without least delay in poverty struck tribal areas.
US TRADERS FOR IMMEDIATE PAK HELP:
Only hours afterwards Pakistanis, particularly exporters of textile products had to take sigh of relief that not EU people alone but businessmen of the US too were planning to expedite trade help for them. Both countries were not unaware rather nearly vexed on frequent approaches from top officials to exporters. The answer was not in negative bluntly but polite messages were coming to wait for some months.
The EU was to have talked out an accord by end year or early next year. The US was in a fix owing to hardly clean message the economic recession had ended. Top economists have quite often spoken about even double-dip. They have given signal of system failure but have not made any mistake to mention was have proved counter productive. The president is on war path with odds making recovery shady ever since he came to power.
The moves are working but not as satisfactory as America would have liked to. It was President Bush (Junior) who had promised to Pakistan during has visit to allow duty free access of goods, particularly the textile made-ups from poverty-ridden Fata and Pata along Afghanistan. But since long four years, eager Pak textile manufacturers and exporters have been praying the congress gave the legislation a concrete shape and exports started. The opposition of the local manufacturers who stood against it blocked the safe passage. Now, after horrifying flood damages seems to have touched the heart of US traders who feel proceeds in expedited. How long it takes one will have to undergo a patient wait.
EU TO WELCOME PAK GOODS ACCESS:
It was to happen by year end or early 2011 but the deluge and floods that dropped down from the innocent looking skies Oh. It is over a month still needing to vacate people from their hearth and cosy home. The European commissioner for International Co-operation Human Larken Aid and Response Georicva visited flood hit areas said that EU would welcome Pak authorities for negotiations with EU counterparts for further discussions on lingering-hunger and diseases.
The subject changed to floods and flood related ravages leaving readers stunned how came "EU to welcome on Pak goods access". No doubt the issue is vital and has remained as vital and obliging and will go a long way in gradually obliterating litter in four provinces of the country. The time is most opportune and needs Pak goods allowed access before time loss in trashing out.
According to the report addressing a press conference the commissioner said the EU humanitarian response for the (flood) disaster was worth more than Euro 200 million to date. Besides, EU member states had also acted without killing time worth about Euro 130 million thus far. In addition to this she went so far to express that whenever she went in the affected areas she found unprecedented ravages as properties, infrastructure and livelihood had been completely destroyed, naturally, to rebuild them as early as possible.
So with the passage of time Pakistan will be left practically alone and will have to do dams, reservoirs, infrastructure depending on trade, and exports. In recent past several calls have been given to this effect only need is a decision at the earliest.