The week began with panic buying, closed with panic selling both on domestic, global markets

Price trend and panic buying both were at top during the week when spot rate reached all time high at Rs10500 while phutti rates touched the selling marked during the cotton season around April/May. The cotton dipped taking cue from world trend in the closing sessions shedding Rs1000.
WORLD SCENARIO:
The rising streak in cotton futures said to be right from 1996 shaken on Wednesday last leaving players to dive into guesswork whether a halt is around. The fast developing China working hard to feed its much above a billion populations has cotton reached $2 pound, several cents higher than prevailing in the US markets.
The factor that has played havoc is bad weather and lower acreage. The bad weather acted in delaying plantation. The production estimate was of three sizes as seen by three organisations one put it at 6.4 million tones, others at 6.7 and 6.45 million tones. China will need to place import orders but in order to save as much that could be possible by supplying from ready stocks. In Pakistan cotton buying is reaching at top with the object of available quality cotton. The prices at which last purchases were made were at Rs10,000 and Rs11,000 per maund, more than double compared with when season's transaction started in April.
How much will leave the margin if exports to the EU per recent accord will leave is worry of the nearly panic buyers. Pakistanis have been pretty silent over fate of nearly one million bales contract entered with India. The neighbours are keenly watching the rising trend where after authorities will issues licenses to the cotton exporters.
On Wednesday the US and China cotton futures climbed to another record, with the latest push coming from a US government report, which raised China's import estimates and lowered global production forecast. US cotton is the top performing commodity on the Reuters Jefferies Commodity Index, having more than doubled in value this year, while China's Zhengzhou cotton futures have shown a similar trend.
On Tuesday the US cotton futures ended at an all-time high, rising for the eighth day in a row due to relentless Chinese mill and investor buying and no sign the rally in the overbought market is slowing, analysts said.
Cotton rates, the top performing commodity on the Reuters Jefferies Commodity Index, having risen almost 95 percent in value year to date. A normal bull market would have higher highs and higher lows, but the US cotton market no longer resembles that, he said. The benchmark December cotton contract on ICE Futures US increased the 5.00 cent daily limit to finish at $1.5123 per lb, with the session low at $1.4727. Under exchange rules, the daily limit will rise to 6.00 cents on Wednesday.
On Wednesday the US cotton futures charged to a new record top but closed sharply lower, the first time it has fallen in nine sessions, as heavy investor selling and profit-taking finally deflated the market's record run. A spike in cotton margins to its highest level since 1996 prompted investors who have seen the market rise nearly 32 cents the last nine days to cash in their gains. The US cotton market on ICE Futures US rates the top performing commodity on the Reuters Jefferies Commodity Index this year, having risen more than 95 percent in value during Wednesday's session. At the end of the day, it was up over 85 percent. The benchmark December cotton contract on ICE Futures US rose the six-cent daily limit to trade at a new record of $1.5723 per lb in Asian trade. It then fell the limit to a low of $1.4523 during the US trading session. The December contract ended 5.58 cents lower, down 3.69 percent on the day, at $1.4565 per lb. The current most-active March cotton contract finished the 6.00 cent limit down at $1.4111.
On Thursday the US cotton futures closed lower for the second day running due to investor sales and profit-taking, pressured by lower Chinese cotton prices as the trade mulled whether the four-month long rally is finally at an end, analysts said. Cotton prices had been rallying since July and hit levels this week that have not been since the US Civil War in the 19th century. Despite selling off in the last two sessions, the US cotton market on ICE Futures US is still the top performing commodity on the Reuters Jefferies Commodity Index this year, having risen over 80 percent year to date.
The benchmark March cotton contract on ICE Futures US fell 1.93 cents to end at $1.3918 per lb, dealing from $1.3666 to $1.428. The spot December cotton futures lost 1.44 cents to end at $1.4421. Late index fund rolling narrowed the difference between the two contracts and pushed December into negative territory.
On Friday the US cotton futures slid for a third day in row as lower Chinese cotton values and a sharp rise in US margin rates took their toll, possibly ending the market's four-month-long rally. Cotton prices had rallied since July and scaled levels this week unseen since the US Civil War in the 19th century. The benchmark March cotton contract on ICE Futures US fell the five-cent trading limit to $1.3418 per lb. The session high was $1.3655. Despite the massive sell-off, the US cotton market on ICE Futures US was still the top performing commodity on the Reuters Jefferies Commodity Index, having risen more than 75 percent year to date. Bill Raffety of commodity brokerage Penson Futures said cotton suffered because of news of weaker Chinese prices, a requirement by banks to increase their reserve funds, and fears of an interest rate hike in China.
LOCAL MARKET:
The week opening day on cotton market was spectacularly marked by unprecedented raise in prices, as consumers indulged in sort of panic buying to avoid missing quality lots. Price hike is today world phenomenon, despite reports that yield and consumption won't be much wide.
The spot rate jumped to a dizzy height at Rs10,000 after record one day's raise of Rs1100. Buying lint 35000 bales in price range of Rs10000 and Rs10,100 while seed cotton in Sindh and Punjab ruled at Rs4300 and Rs4,500. Market sources aghast themselves commented crop damaged by monster floods is being played up out of proportion backed also by world price trend. In Pakistan value added sector is in look out for ways to minimise loss and ever facing possible closure of units.
On Wednesday there was no respite as heat further smoldered adding another Rs500 to the spot rate touched Rs10,500 peak. In ready business avenging consumers laid hands on 52,000 bales in price range of Rs10,000 and Rs11,000 mocking at the trend when cotton season began at today's phutti rate per maund or around. The cotton fundamental is strong on its own budding no care to slipping dollar, which pulls commodities bound by it its way. And Obama says dollar is taking cue from still out of catch economy.
On Thursday rising tempo came to halt but buying surprisingly was juts halved compared with total on Wednesday. Seed cotton in Sindh and Punjab quoted to Rs4400 and Rs4500. Market observers were least surprised at the abrupt movement, which often is linked with foreign trends. The case of Wednesday flush buying was without any perception. Buyers must have been unhappy on Friday.
On Friday weakness prevailed on the cotton market on Thursday as prices in ready business and spot rates fell sharply mainly because of fall in the NY cotton futures, dealers said. The Karachi Cotton Association (KCA) dropped significantly by Rs 1000 to Rs 9500. Similarly, seeds cotton prices in Sindh and Punjab were also sharply lower by Rs 600-500 to Rs 3,800-4000. In ready business activity was thin as compared to the other sessions as 21,000 bales changed hands between Rs 9000-10,000.
On Saturday panic selling pushed the prices further down as ginners were not ready to adopt wait-and-see attitude, dealers said.
The Karachi Cotton Association (KCA) continued cutting its spot rate by another Rs 1000 to Rs 8500.
Similarly, seed cotton prices in Sindh and Punjab were also sharply lower by Rs 300 to Rs 3,500-3,700, they said.
In ready business, 24,000 bales changed hands between Rs 8000-9,000.
PULLING FARMERS OUT OF FINANCIAL CRISIS:
Actually the first line of the report should be pulling Pakistan out of depression of all conceivable ills. This is surely not the first time in 60 years that agriculture can feed and clothe people has been unmindfully or reluctantly agreed upon. It was in Faisalabad where addressing participants of farmers' convention Malik Ahmad Ali Aulakh, provincial Agric Minister said that despite having numerous sectors involved in national development, agric sector is providing a lion's share with 52 percent to the GDP.
When the country was carved out in 1947 God had been bountiful to this infant country by awarding richly fertile land which if got just a tad human care ever would not be at the edge of called 'failed state'. But would have been equal to, if not ahead of India and China, Singapore and Malaysia. Unfortunately those who could have given meaning to much cherished democracy were either removed or could not start to see the shape of things were to come.
The speaker on the occasion reminded that even today a progressive farmer is getting 60 maunds wheat from one acre, but national wheat production remain stagnant at 27 maund an acre. So far discussion revolves round plight of agriculture. That land rich in giving good yield has never been put in use has always been a guarded secret. The condition of farmers is aimed to better so that their run to city is help up. Fallen use of entire land by owners for wheat, rice, sugarcane to export the surplus and cotton and cotton products that earn maximum forex are grown more on the unnaturally made unfertile track of land. And also, those growers are provided requisite money without much hassle.
SAVE MASSIVE CLOSURES:
Two or three wars Pakistan fought looked initially like scaling Mount Everest but history is a witness they came out triumphantly. Making textile products opportunity bearing at arms length resoundingly from the EU won't end in frustration. The authorities, no doubt are faced with catastrophic conditions are however not entirely unmindful of mending dents wherever they are spectacular.
Exports particularly that of value-added guarantee for earning singly over 60% of total exports, what however is boggling the mind of positive contribution to economy that how the export target of 25 billion dollars by 2014 that first ever textile policy seeks. Constant efforts of authorities have secured good business in the 27 states of the EU. Very lately duty free exports of guaranteed textile value-added products likely to resume next year. Subject to certain provision, such as heading to rules of the WTO for keeping school going children away from workplace, together with protectionism means in exports.
The sulky and discontented tough yet ready to try hand look for helping hand of the government sought reviled package which comprised of the utilities prices for industry, suspension of export development fund collection forthwith, abolition of taxes (including reformed GST) special mark up rate smooth flow of raw materials to textile ancillary industry. About textile policy he said is useless unless the government overcomes energy, labour law and order and marketing issues of ancillary industry. Authorities should come up with helping hand.
ENHANCED EU MARKETS FOR PAK PRODUCTS:
Whatever ways we indicate our will to seek or mend ties for an honourable two-way trade with any country they sound below norm and dignity. Quite long back the textile exporters to the EU components were regular victims of one or the other ways of protectionism and when the WTO was floated, its rules were beamed emitting unpleasant communication to set house in order. A significant herd of below poverty, level sorts unable to manage unplanned offsprings engaged in menial jobs to supplement elders earning to stop and due of hunger. Governments had to reduce customs duty imposed to give cover to local industrial production to survive in countries beyond borders.
In Morocco over a decade back sacred scores of pages registered philanthropic emotion. But dozens of meetings, coups, and emotional calls ever since 2001 without an answer. Under the visible circumstances, what has been offered some days effective from early next year, --- GSP-plus. The powers have been seemingly very touchy about WTO rules. They will keep an eye on violations of WTO rules. The GSP-plus, being enjoyed by China, India, Bangladesh, Sri Lanka etc have satisfied the WTO their grip over its rules violation.
However, needy as Pakistan is today, leaves no scope for any mishaps. God bless-GSP plus is awarded to this country in as real terms, others have already enjoying what however, sources insisted to pulling fingers on the aching place - Pakistan should have something to pay back.
COTTON, YARN AT CONTROLLED RATES:
The suggestion that has been proposed by the value-added textile sector will be received favourably or go the way various moves have gone. Months have been prodigally whiled away in talking issues. The same quite obviously was meant and should have yielded in some accord that would have gone a long way in not only saving precious time but also have led to enhanced value-added exports the country and economy are so desperately looking the left and right.
What perception the donor countries have developed about our ways of approaching is hardly appreciable or, the way visiting US President paid tribute to Mumbai victims, while meaning fully 10-day itinerary excluded Pakistan! The fact that cue came from victims or the highest forex earners for Pakistan provide moment for pondering what textile ministry is doing for over a year in existence, sources expecting wonders said, adding where is the resounding yield judged from point of view when commerce or finance ministers were holding the rein? The Ministries should not necessarily follow suit how the country is being run.
Textile ministry still has to come out from infancy but it can see ministries working in India, China and even Bangladesh and Sri Lanka. Does anybody know how response and from where will it land about trying formula presented by the aggrieved value-added sector?