Higher cotton yield projections, increased global production reports push prices downwards; spot rate slashed to Rs 6,800

Monsoon rains have started in major areas where cotton is produced and growers are more than optimistic for easy going. Lately prices are coming down the spot rate on the last date was Rs 6,800.
WORLD SCENARIO:
Indian cotton production suffered from poor rainfall in June that has denied the prospects of exports from 6.5 million bales. Farmers were planning to go for some other crop, which could give food yield such as soyabean. Cotton touched record price at 61,700 rupees per candy of 356 kg, boosted by rally in the world. However, prices have gradually been softened.
Pakistan is not making its claim for the lint that was over one million bales. Actually the importer have been quiet lately. Indian opposition at WTO-where EU package was lying for over six months has finally been forsaken.
At home Pakistan as rains fall growers are quite optimist bumper yield is likely roughly 14-16 million bales. China is planning to grow more cotton so that it could save costly foreign exchange. However, weather condition was ultimately to tell the China lives upto its perception. Any cotton is surplus in Australia, Argentina, Brazil and Uzbekistan from where needy can acquire their needs worth. The economists however are much less disappointed over the developments in ME, Japan and even in Europe. They are expecting whatever the production of cotton, demand was expected contract.
On Tuesday the cotton futures finished lower on a fresh round of investor sales as the market failed to derive any inspiration from a recovery in the commodity complex after a holiday weekend, brokers said. The market was shut on Monday for US Independence Day. The key December cotton futures on ICE Futures US dropped 2.29 cents, or nearly two percent, to settle at $1.1552 per lb, dealing from $1.1502 to $1.1959. Volume traded stood at 16,100 lots. About a fifth below the 30-day norm, Thomson Reuters preliminary data showed. Analysts said the December contract's Bollinger band, a popular technical indicator for traders to determine a relative definition of high and low prices, showed it is approaching the lower end of that band and may go below it. Thomson Reuters data showed the bottom of the range around $1.137.
On Wednesday the US cotton futures finished lower on as the market fell for the fifth session in a row as soft commercial demand and a rate increase in top consumer China undermined the market and could point to further losses in fiber contracts. The key December cotton futures on ICE Futures US dropped 2.10 cents to settle at $1.1342 per lb, dealing from $1.126 to $1.1773. For the third position contract, it was the lowest finish since November. 30. Volume traded stood at 10,600 lots. Almost 50 percent below the 30-day norm.
On Thursday the US cotton futures recovered slightly due to improvement in demand by the buyers. On Friday the cotton futures finished marginally higher on buying by small investors as players adjusted positions while waiting for a government crop report due out next week. The key December cotton futures on ICE Futures US rose 0.36 cent to settle at $1.1388 per lb, dealing from $1.1313 to $1.16. Volume traded stood around 8,300 lots, some 60 percent below the 30-day norm. "The specs are waiting for a signal, any signal," said Mike Stevens, an independent analyst in Louisiana. That signal may well come from the monthly supply/demand report of the US Agriculture Department, which is due out next Tuesday, and the USDA's weekly crop progress report being released on Monday.
LOCAL TRADING;
Monsoon rains have inspired the otherwise disheartened farmers to harvest much grains particularly cotton, as a result the lint prices sticking to firmer level have continually been dragged down. Spot rate was slashed by Rs 850. The buying level went up 2400 bales of cotton on the opening day at Rs 7750 and Rs 7900 depending on quality, spot rate was reduced by Rs 200 to Rs 7800, phutti prices in the running week started in firmer tone, higher by Rs 200 in Sindh at Rs 3300 and Rs 3400 while in Punjab same ruled up Rs 300 to Rs 3100 and Rs 3400.
On Tuesday sustained downtrend was marked as spot rate was pulled down by Rs 200 to Rs 7600, seedcotton rates were also down same amount in Sindh to Rs 3100 and Rs 3200, in Punjab down drift was Rs 200 to Rs 300 to Rs 2900 and Rs 3100. Cotton consumers lay hands on 3100 bales at Rs 7600 to Rs 7900 depending on quality, slight panic was seen among cotton sellers as optimism developed about bumper production.
Meanwhile, world trend was also soft owing to increased acreage being used for supplying to countries where production failure is alarming.
The sellers were reluctantly though accepting that rains were good for the cotton productions naturally pulling prices lower, vividly seen in spot rate slashed by Rs 500 to Rs 7100. Seed cotton prices gave in Rs 200 to Rs 300 in Sindh to Rs 2800 and Rs 3000 while in Punjab prices lost from Rs 300 to Rs 400 to Rs 2500 and Rs 2900. Buying was modest around 3400 bales of Rs 7000 to Rs 7500 depending on quality.
On Thursday market saw no respite in price fall, but buying going slow for some time boosted. Spot rate was down Rs 300 to Rs 6,800 - down this week nearly Rs 1000, seed cotton was marked at Rs 2800 and Rs 2900, while in Punjab at it was down seen at Rs 2500 and Rs 2900. In ready off-take 12000 bales of cotton changed hands at Rs 6500 and Rs 7000. The latest position has according to market sources unnerved the sellers as phutti arrivals have gained pace.
On Friday in the port city of Karachi no business was witnessed on the cotton market on Friday as vehicles were off the routs after the Muttahida Qaumi Movement (MQM)'s announcement for one-day of mourning against the latest surge in violence.
The Karachi Cotton Association (KCA) was closed and did not issue rates of cotton so the official spot rate was unchanged at Rs 6,800. Seedcotton rates, stabilised in Sindh at Rs 2800-2900, prices were up by Rs 100 in Punjab to Rs 2600-3000. In the upcountry markets, in the Punjab, cotton traders did not take part in trading activity as most of them observed Friday as a holiday. On Friday, police and paramilitary troops were ordered to shoot on sight after several people were killed in three days of violence. In Karachi, most of the commercial centres and fuel stations were shut and public transport idled after the Muttahida Qaumi Movement (MQM), announced a day of mourning against the latest surge in violence in the country's financial and commercial hub. According to a report, India has released quota to 270 exporters to export one million bales of cotton.
On Saturday mills were active to cover position at the declining rates as ginners were unwillingly prepared to sell at the lower rates due to good cotton arrivals. KCA official spot rate was unchanged at Rs 6,800. Seedcotton rates in Sindh were higher by Rs 100 to Rs 2900-3000, prices were inert in Punjab at Rs 2600-3000. In the ready business trading activity picked up as some 4,600 bales of cotton changed hands between 6,800-7000.
PAKISTAN TEX CITY NOW FAST TAKING SHAPE:
After years of vain wait, the authorities mused nation saying witness the commitment grow into (a paper tree) reality. The nation particularly the textile exporters would have been pampered that among the three or so textile cities, Pakistan textile city and garment city, some have taken shape and contributing to the exchequer. Instead the fruits are seen decorating the tree still are avoid of taste. Among nine fruits only three could be consoling like master plan from Port Qasim Authority approved, levelling and grading works on 1250 acres completed and administration building at Site functional. Separate messages that booking of plots commencing mid-July 2011 or happily in a few days time.
The rest of the commitment read wait such as environment impact assessment approved, contract action on 250MW captive power plant, laying of water pipeline (48" die) by KW&SB to textile city, water works including 20MGD, road construction and the most import contract action for combined effluent treatment plant are in progress. Similar projects were announced for Lahore and Faisalabad. Garment City was in Karachi is no more talked.
Why so much delay occurred merely relating to Pakistan Textile City in Karachi. As far as the knowledgeable sources are concerned money may be important reason but what else they asked. So much time has lapsed on one project so far, how long will it take should authorities let the relevant people know. Textile is not being supported by any other and has Sialkot be given necessary attention and without much loss of time.
VISITING CHINA TO DEVELOP TRADE TIES:
It is today a hearsay that when this country was crated, the Soviet Union (Union of Soviet Socialist Republics) in search of primarily an emerging country dashed to Pakistan hands of friendship stretched full-length, but was cold-shouldered on flimsy ground. India, watching the scenario rushed forward to be friends the then USSR.
The more than pleased developed thoroughly USSR embraced India. The following years, until the Empire was splintered into virtually pieces, India sought to learn all sorts of technology from needle making to manufacturing war machines. Now, perhaps barring from past mistakes, Pakistan has build itself of not that huge size of India stand with China as a friend size of which is send to higher than Himalay's and deeper then seas.
But the stature and size India was conferred by the USSR and in that sense Pakistan has continued to lag behind. Some mark can Pakistan in due course on signing the membership of Shanghai Co-operation Council (SCC). Now TDAP chief is there where he briefed Chinese about the potential of natural resources especially gems and gemstones in northern areas of Pakistan.
After over 60 years as is evident from the above plea, he invited Chinese experts to explore opportunities in this sector and set up production facilities or they shower so much kindness to seek joint ventures with Pak companies to promote and develop the sector. The sources commenting on the story said they were not sure if India had sought similar help!
IRRIGATE CROPS CAREFULLY MET ADVISED FARMERS:
Farmers, as far as possible, should try to follow the experts advice to spare themselves from losses. In the absence of any advice or if heed is not given, they are liable to not only spend more on urea and other drugs that affect crop adversely. Crop, wheat sugarcane like crops are in the fields, and monsoon has crept into northern areas.
The met office is issuing reports on daily basis which if headed to can save from unnecessary labour and expenditure. The monsoon has penetrated with skies overcast with black could so intense that reports say day July 1, 2011 presented as pitched dark night. Since independence governments enjoying power have waited for the governments replacing them will think about huge dams like Mangla and Tarbala. But dams of this size proved too much, even Bhasa and like dams have allowed to be discussed, money drained on and then decided for some future occasion.
There is one dam poor Kalabagh dam agreed on all hands can play wonders for thirsty crops and power, but has lingered on lacking what politicians call "difficult decision". The met office has welcomed to advise the farmers of Punjab, KP and North-Eastern Balochistan to irrigate crops carefully as monsoon rains during the next 10 days are expected. The Met has advised farmers to irrigate crops with caution and in line with its updated forecasts - repeat, updated forecasts. The met experts said farmers could delay irrigation in areas where monsoon rain continues falling. Perhaps the advice could hear funny had big and small dams bitterly literal aimed at collecting water instead of allowing them to drain out into the sea.
TEXTILE CITY LAUNCHING HEARS NICE SOUNDING:
The nexus, however, with the EU trade package is thoroughly mystifying. It would be greatly joyful had textile city being producing textile products and supply to importers had started instantly. No, far from it. That a textile city in Karachi, and perhaps in Lahore and Faisalabad, too, was planned. Intervening period, when peoples memory lost textile cities were planned once upon a time, report cautioned cities are in the offing. But talking on the occasion more loudly about the EU package, that the exporters must have been allowing the package to ship out of mind, is baffling. The textile minister seemed curious to propound how much worth the textile city would be - create new 80,000 jobs besides providing support and hassle free environment to the textile industry more so to the value-added textile sector.
The city or textile city about which so much optimism is harboured is hard to locate anywhere on this earth what seems to be common is both - the EU package and textile city is improbability - right-at the moment. The textile minister is pulling courage to discuss strategies with the ministries of commerce and foreign, to take up the rejection by the WTO with the European Union. All the members of the EU particularly those who can influence like Germany, France, Italy and Britain have nodded in affirmative. The only or say a couple of "ray' from WTO members has out done the entire package so that Pakistan exporters could have earned and helped the flood damaged economy. As far as textile city is concerned authorities should probe and ponder money or some industrialists are opposing textile cities"?