Ravaging rainwater threatens standing crop, disrupts supplies causing spot rate rise by Rs1,000, lint prices by Rs1,300

Cotton trading was mainly restricted by rain, which made movement difficult during the week, ended on September 10, 2011. Prices marked rising trend. KCA raised spot rate by Rs 1000 to Rs 7000. Lint prices were boosted from Rs 6200 to Rs 7500.
WORLD SCENARIO
China is on the verge of announcing cotton buying from its farmers. The rate is 21625 yuan per tonnes exports consider good support. China is quiet at the moment whether India, second largest exporter, and which has declare to supply needy around 255,000 tonnes priced at $1.0 per pound to mainly Bangladesh and Vietnam. Earlier had this country held back stocks apprehending topsy-turvy downpour might force to keep back for home consumption.
Luckily or otherwise the price India is getting yet at $1.04 or like amount. There are many who believe ruling futures prices may further erode to touch 80 cents to 70 cents ruling price before March 2011. India wants to hurry up before further decadence followed. Pakistan, which suffered on India's account and had to look around for cotton at higher rate including Uzbekistan some how, managed. But is facing once gain deluge, which according to initial report sustained so far in Sindh and Punjab over 30pc of the total - inclement weather is persisting and growers and interested quarters sit fingers crossed. Besides, load-shedding and other adverse conditions prevailing. Australia, which reaps bumper cotton crop and no home consumption space, still hope to harvest bumper crop. It will have easing effect on the otherwise pestering price hike. The experts see floods in Pakistan and floating orders by China bolster the market.
On Tuesday the NY cotton futures settled slightly firmer on investor buying in range-bound trade after a holiday break, ignoring weakness in other markets. The cotton market was shut on Monday for Labour Day. The key December cotton contract on ICE Futures US rose 0.45 cent to close at $1.0634 per lb, trading from $1.0386 to $1.0688. The market stayed within the 3.72 cents range it was in all of last week. Thomson Reuters data showed that since mid-August, the December contract has traded at a low of $1.0174 hit on August. 25 and a high of $1.09 set on August. 24. Volume on Tuesday was almost 8,900 lots, over a quarter below the 30-day average, preliminary Thomson Reuters data showed. Traders had been expecting cotton to fall given that global stocks fell on fears about a US recession and the European debt crisis worsening.
On Wednesday the NY cotton futures finished up their daily limit at a two-month top on investment fund buying and analysts said the momentum from the advance could well push fiber contracts higher the rest of the week. Benchmark December cotton contract on ICE Futures US rose the four-cent limit to close at $1.1034 per lb, with the session low at $1.0589. It was the loftiest close for cotton since July 8. Since mid-August, the December contract has traded at a low of $1.0174 hit on August 25 and a high of $1.09 set on August 24. Volume on Wednesday was almost 13,600 lots, around 15 percent above the 30-day norm, preliminary Thomson Reuters data showed. The market surged on both fundamental and technical factors.
On Thursday the NY cotton futures ended at a fresh two-month high on follow-through investor buying although profit-taking pruned the market's gains. The key December cotton contract on ICE Futures US rose 3.29 cents, or almost three percent, to end at $1.1363 per lb, trading from $1.1117 to $1.1547. It was the loftiest close for cotton since July 8. Volume on Thursday was almost 26,500 lots, the highest amount traded since July 15, ICE Futures US data showed. The total traded would be more than double the 30-day norm, preliminary Thomson Reuters data showed.
On Friday the NY cotton futures fell for the first time in five sessions, unravelling from the prior session's two-month high, as investors gear up for a key government crop report early next week. The key December cotton contract on ICE Futures US fell 1.76 cents or 1.55 percent to finish at $1.1187 per lb, after dealing between $1.1044 and $1.1425. The price weakness originated in Asian markets, with the three-month rolling cotton contract on the Zhengzhou Commodity Exchange falling away from a six-week peak hit on Thursday. According to a report India will continue with unrestricted cotton exports in the new marketing year beginning October. 1, Trade Secretary Rahul Khullar told reporters on Friday, a move that could depress global prices, which have halved since a record high in March. India's cotton exports have already been cited as a key factor in dictating fibre prices in the 2011/12 season by the chief executive of the world's biggest cotton merchant. Besides, Chinese analysts expect the country's cotton output in 2011/12 crop year to be 7.4 million tonnes, 17.8 percent higher than their estimate for 2010/11, according to a survey of six analysts contacted by Reuters on Friday. The median forecast is an increase of 1.12 million tonnes from the 2010/11 median estimate of 6.28 million tonnes by the same analysts, and higher than the US Department of Agriculture's August forecast of 7.19 million tonnes.
LOCAL TRADING
Incessant rain in cotton growing areas are restraining seedcotton arrivals. On Monday cotton in stock was selling at higher rate around Rs 6200 and Rs 6300. In ready only 1600 bales of cotton changed hands. Spot rate was unchanged at Rs 6000, while seedcotton in Sindh was doing around Rs 2300 and Rs 2500, while in Punjab rates ruled at Rs 2300 and Rs 2650. The market operators observed unwanted rains have caused rise of Rs 400 to Rs 600. The cotton quality is deteriorating.
On Tuesday mills stepped up buying helping prices appreciate said to be sharply. The spot rate was raised by Rs 300 to Rs 6300, seedcotton in Sindh were marked at Rs 2300 and Rs 2600, while in Punjab was marked at Rs 2300 and Rs 2800. Prices punching though buyers lifted 9000 bales of cotton in price range of Rs 6200 and Rs 6800 depending on quality. The cotton consumers are apprehensive about ceaseless rain, which will press sellers to raise prices.
On Wednesday spot and prices in ready rose as buyers indulged in speculative buying eyeing deluge may not spare any time soon, official spot rate was raised by Rs 200 to Rs 6500 and rate ruling in ready off take any amount between Rs 6500 and Rs 7000 depending on quality. Some 10,000 bales of cotton lifted. Market-sources for the first time reluctantly expressed production below 16 million bales. Globally speaking rates are ruling $1.24 and like amount.
On Thursday cautious buying was marked on the market as spot rate was up Rs 300 to Rs 6800, consumers bought 7000 bales in price range of Rs 6700 and Rs 7100. The rains have restricted supplies and causing price hike.
On Friday trading activity slackened as mills kept to sidelines after sellers increased the prices, official spot rate was raised by another Rs 200 to Rs 7000. The prices of seedcotton in Sindh were at Rs 2300-2800 and rates in Punjab at Rs 2200-3000. in ready dealings nearly 3,000 bales of cotton changed hands between Rs 7000-7,200.
On Saturday prices were up amid rising anticipations about further increase in the rates, spot rate was unchanged Rs 7000. The prices of seedcotton in Sindh went up by Rs 200-100 at Rs 2500-2900 and rates picked up Rs 100 in Punjab to Rs 2300-3100. In ready dealings nearly 9,000 bales of cotton changed hands between Rs 7000-7,500.
NA BODY TO EXCHANGE IDEAS WITH TEX EXPORTERS
The NA body meeting with chairman of all value-added textile association to get first hand knowledge on matters relating to the miffed sector. The only sector the so-called value added sector which, if, well preserved and well looked after of its need has generating capacity to deliver 10 times more than today's worth. It is hoped body has exercised in detail and reached the crux destabilising the sectors for no fault of theirs.
The meeting is planned to take place at the Pak Hosiery Manufacturers and Exporters Association. On the leaders of various sectors should dawn that they are richly ready to pour into them positive and practical knowledge to contribute what is required to keep value added sector back home. Now a days call is turning louder Pak value-added sectors are dreaming to a joy ride to countries ensuring return was not possible here.
The NA body will deliberate deeper into complexities that surface hardly in day-today sit-ins. What right at the moment is important the body is also scheduled to held meeting about the progress of work and matters relating to leave of plots of Pakistan Textile City in Karachi. Is there any reservation on the lease or the practical race for acquiring plots has not been clear.
The Textile City Karachi and similarly Textile City and Garment City plan has become nearly four-five years old. Long before a dimly voice against the textile and garment-cities was heard. Let it be so, but NA body must induce existing value-added manufacturers and exporters and yarn makers to patronise. The "Cities" will open unfolded opportunities is the need of the economy and country.
RAW COTTON EXPORT POSTS REMARKABLE SURGE
Had other side of the story not been so hurting, heavy rains have already taken mercilessly 300,000 bales, export about raw cotton could be nice sounding. But consecutive second year deluges in Sindh have done phenomenal damage, the export surge, which is being celebrated, would be of some worth. If cotton continued to be exported with pace and speed, treatment with cotton yarn should be respectable to facilitate textile exports, which earns Pakistan highest amount singly.
Report says Pakistan raw cotton is much cheaper than available in global markets. The rate prevailing before Eid was Rs 5700 - Rs 5800 per maund, lower by Rs 300 to Rs 500 compared with ruling world rate.
According to market operators, the sowing has been larger than previous years and production is expected, if all went well, around 16 million bales. But the mood of the monsoon is hardly a welcome. The rain affected residents of the area speak louder what the crops particularly cotton must be standing against. Outright survey of damages thus far has been placed at 300,000 bales. More rains, particularly in Sindh have been forecast, while parts are already under attack. Who knows when another survey will be conducted how much more loss is marked. God bless, the loss is manageable.
STANDING CROPS WORTH BILLIONS DESTROYED
The news about damage to crops from sporadic rains in Sindh could possibly have been saved from damages but proper care seems to have not been taken resultantly the huge damage. The relevant department took upon itself to caution growers when necessary to take advantage of rain or water fields through other means. Growers cannot relax as far as their crop is concerned. All crops are important, in this case cotton has received special mention. The cotton growers are under impression rather stress that 16 million bales in anticipation of increased orders from EU, China and elsewhere.
Rains are God's gift. God for bid if drought prolongs such as has been witnessed by Texas in America, which has taken heavy toll of cotton crop. Growers in Pakistan should welcome rains, while excess care demanded for drought, which is not rare. Another spells of rains are being announced these days with chances of heavy rains. The growers in Sindh, particularly in areas where cotton crop is growing special watch is required to avoid any damage from excess rains.
TEXTILES ON MOVE FROM PAKISTAN
The other day news report headline created such impression as if in a matter of days. The lucrative ones recognised BD as one of the poorest countries, move had been heard. Pakistan was not the sole country but countries with own raw materials and products commanding edge in countries importing textile products had crossed border one such being India. Some BD enthusiasts out of sheer previous relation came out to invite Pakistan. Counterparts to start business and gain from the same.
This is another sound call from BD and being tough time for textile industry, appeal may touch textile millers here. But difficult time apart, Pakistanis should recall BD textile exporters has odd time with Indians for making available cotton yarn at the rate unacceptable to them. Recent power and gas shortage has also been reported. Hence if it is not workable in own country Pakistanis could look into prospects and move on the BD.
Besides other advantages cheaper labour and crucially, tax-free access to 37 countries, including most hotly sought markets in European Union, Canada and Australia. It is true, the home condition in Pakistan is such the foreign buyers are reluctant to place orders due to security concern gains and favourable condition should be closely watched before deciding to relocate or expand business in Dhaka.