Official spot rate, lint prices in ready fall sharply on increased phutti arrivals; down trend prevails on US futures market

Maximum numbers of cotton bales were bought and sold during the outgoing week ended on November 26, 2011 supported by rush of seedcotton supplies and buyer favourable prices. KCA reduced official spot rate by Rs 600 ie from Rs 5800 to 5200, similarly prices in ready fell sharply-from Rs 4200-6000 to Rs 3700-5200.
WORLD SCENARIO
The global uncertain outlook is immensely weighing on cotton demand and prices. The buyers and sellers are keeping cautions eyes on unfolding vistas. China the highest consumer of cotton, which has seen its textile demands gradually slimming, held cotton buying after receiving quality cotton. It seems China may wait until prices cool down. India second largest cotton grower, trying to sell cotton above dollar one per pound is getting prices around. The setback caused by abnormal rains during Sept-Oct blocked picking thus holding back some one million bales of cotton nearly ready for shipment for quite some time.
China, certain buyer of Indian cotton after the US, has changed its destination and has trade links with Brazil, China has over taken South Korea, Indonesia and even Australia depending on value. India supplied most of the cotton demand to Pakistan, but since that country refused to deliver agreed quantity, and, of course as India gives to understand, that it expects bumper crop locally (in Pakistan) and won't approach any country to deliver.
On Monday the US Cotton futures ended down by their daily limit on wholesale investor liquidation as European debt woes and budget deadlock in the US underscored fears a global recession would cripple demand for cotton. Global stocks sank on Monday due to worries over out-of-control debt on both sides of the Atlantic. The spot December cotton contract on ICE Futures US dropped four cents to finish at 90.81 cents per lb, with the day's top at 95.78 cents. The now most-active March cotton futures fell 2.86 cents to end at 90.41 cents, moving from 90.16 to 93.71 cents. Total volume traded on Monday hit almost 29,400 lots, one-third above the 30-day norm, preliminary Thomson Reuters data showed.
On Tuesday the NY cotton futures finished mixed in spread trade, with the weak macroeconomic outlook seen keeping fiber contracts on the defensive. Global stocks fell on Tuesday after data showed the US economy grew more slowly than expected in the third quarter of 2011, while euro slipped versus dollar, as investors shunned risk. The spot December cotton contract on ICE Futures US fell 0.86 cent to finish at 89.95 cents per lb, dealing from 87.50 to 90.75 cents. The most-active March cotton futures rose 0.71 cent to end at 91.12 cents, moving from 89.33 to 92.10 cents. Total volume traded on Tuesday hit over 22,000 lots, less than three percent below the 30-day norm.
On Wednesday the NY cotton futures finished mixed, as the market pruned early losses on commercial buying ahead of the holiday, analysts said. The cotton market will be closed on Thursday for Thanksgiving. Trading resumes in a shortened session on Friday. The spot December cotton contract on ICE Futures US rose 0.76 cent to finish at 90.71 cents per lb, dealing from 89.22 to 91.70 cents. Now most-active March cotton fell 0.21 cent to end at 90.91 cents, moving from 90.10 to 91.91 cents. Total volume traded on Wednesday hit over 12,700 lots, about 45 percent below the 30-day norm.
On Friday the NY cotton futures finished with small losses on sales by small speculators and due to the weak tone of outside markets, with most players sidelined by the long holiday weekend. The cotton market was shut on Thursday for Thanksgiving. Trading ended an hour earlier than the normal closing time of 2 pm EST (1900 GMT) on Friday. The key March cotton futures shed 0.04 cent to end at 90.87 cents per lb, after trading between 90.01 and 91.89 cents. For the week, the market was down almost 2.5 percent. Total volume traded on Friday was a little over 6,500 lots, almost three quarters below the 30-day norm, preliminary Thomson Reuters data showed.
LOCAL TRADING
The week opened with easy condition on the cotton market where spot rate was reduced by Rs 100 to Rs 5700. Phutti in Punjab came down to Rs 2400 and Rs 2800. In Sindh Phutti was quoted at Rs 2200 and Rs 2600. Favourable price attracted buyers to lift 20,000 bales of cotton. The buyers according to market sources would lay hands on more bales but ginners were hoping prices to go up, thus holding stocks back.
On Tuesday speedy and regular phutti inroads pressured sellers to unload stocks, the easy trend in NY also affected ginners thinking. Under the circumstances spot rate was lowered by Rs 100 to Rs 5600, phutti was down in Sindh to Rs 2000 and Rs 2550 and in Punjab Phutti sold at Rs 2300 and Rs 2700. The ginners' hesitation over spinners and millers lifted around 30000 bales in price ranging between Rs 3700 and Rs 5700. Exports of cotton fell.
On Wednesday downward trend continued on the cotton market naturally due to expeditious arrival of phutti. For third day in a row spot rate was slashed bt Rs 100 to Rs 5500, seed cotton remained in Sindh at Rs 2200-2550, and in Punjab phutti lost Rs 100 to Rs 2200 and Rs 2600. Needy cotton consumers laid hands on 20,000 bales in price range of Rs 3500 and Rs 5625. Demand from abroad is keeping cotton preferable for local buyers.
On Thursday another down drift was marked in spot rate to Rs 5400, the seedcotton in Sindh and Punjab stayed at last rate. In ready dealings 20,000 bales of cotton changed hands in price range of Rs 3150 and Rs 5400.
On Friday official spot rate declined for the fifth day in a row amid cautious buying by the mills and spinners. Since the week started, rates dropped by Rs 600 to Rs 5,200. Prices of seedcotton were unchanged in Sindh at Rs 2000-2300 and in Punjab rates were also inert at Rs 2000-2500. In ready dealings, above 15,000 bales of cotton changed hands at Rs 3,510-5,300.
On Saturday no major change was seen in obtaining outlook on the cotton market, as ginners and growers adopted cautious attitude towards new deals. KCA official spot rate was unchanged at Rs 5,200. Prices of seedcotton were unchanged in Sindh at Rs 2000-2300 and in Punjab rates were also inert at Rs 2000-2500. In ready dealings more than 13,000 bales of cotton changed hands at Rs 3,700-5,200.
EU CONCESSIONS PACK FOR PAKISTAN: WHO IS LEFT OVER
One by one, with names countries have been exposed who took pleasure in harming Pak interest, while no one would have been hurt in return. Report quoting diplomatic sources disclosed that Brazil after marathon negotiations with businessmen of the country agreed not to follow reservations on the waiver to this country at the WTO.
Will it be too much to mention in good faith sufficient pangs related with unprecedented deluge have vanished into thin air. If memory is of any help, it was made us to believe that India had with drawn opposition in WTO but dropped hints with BD to strengthen opposition to finally deprive Pak textile exporters EU access package when the package with humanitarian touch was floated in WTO hardly anyone was sensitive about the damage textile exporters had to forbear.
Indian opposition naturally was not a hurting, but then came in open brotherly BD, Argentina, Indonesia and Brazil, on grounds they will lose competitive edge. India was first to be approach who nodded OK for the package. Gradually then the opposers realised if they can be in place of Pakistan tomorrow. The WTO members have decided in favour. The confirmed report to this effect is likely on Tuesday. God willing-favourable reports lands here containing original package size.
COTTON ARRIVALS SHOW INCREASE
The fortnightly phutti arrival report showed that around 7.968 million bales reached ginneries by Nov 15, 2011. The PCGA office bearers briefed newsmen about the latest situation. According to Chairman increase in arrival was 6.92 percent. The figures furnished by the PCGA will be endorsed by cotton committee or interested quarters is perhaps unlikely. Very recently when cotton committee released its finding ginners tried to prove the figures to be far from acceptable. It suggested to induct TCP so that growers were distanced from losses.
The government has not so far shown interest in introducing TCP, most likely because, as it seems, government is engaged in tackling some other issue like, according to users, urea etc, which either is selling very costly or being supplied spurious and likely to harm the crop - be it cotton, sugarcane, wheat or rice. The related couple of problems placed before the readers are not new and need to be tackled through sitting across table.
The authorised committees engaged in collecting production of cotton bales should survey together and declare the possible quantity. The same may be declared by authorities, as acceptable allowing no pace to give ground for disagreements.
PAK TEX INDUSTRY WORKFORCE PRAISED
Pakistan work force and eye catching products they produce have been worth receiving praise from four corners of the world. But do the world craze for products to order imports and beautify showcases in places of businesses.
Before searching the hearts of others, more appropriate would be to discover how much do we value investment and look for market place. Exporters answer honestly, have you any dock leaving aside the EU and the US. Despite such pursuit Pakistan has not as much access as China, India and others have. The US ambassador on a visit to Chenab's stitching centre praised the diversity of Pak textile industry workforce, quoting US secretary who said, "when we liberate economic potential of women, we elevate the economic performance of communities, nations and the world."
Chenab stitching centre employs 1500 women. The ambassador and team noted that Chenab is one of the largest exporters of home textile products. The company covers complete range of textile operations from spinning to retailing. They said last year more than 35000 events took place in nearly 120 countries. The US envoy was ardently hopeful through this initiative the next generation of entrepreneur are inspired and can emerge.
KBP FAVOURS OPERATION AGAINST BLACK MARKETEERS
The potential exporters are increasingly discouraged when authorities just fail to deliver as exchequer keeps screaming. The textile exports proudly called leading forex earner are prey of incumbent rulers who take refuge in abusing about ills left over by those who willy-nilly pass on government to new aspirants. Only the rulers can say with confidence how many roads, canals, bridges have been added into left over by the British rulers. Or can claim how many have they added to.
Their answer with the rulers in high seats of government would without least perplexity somebody else's. The Kalabagh dam costs today from few million of dollars to billion of dollars but cannot be given green signal per opposition of few people.
The result is tons of rain and river waters flow down to the seas. May be one wrong in saying that feasible plans lose their value with the change in governments, which last few years in most cases not given credence to dictatorial tenures. Today the debate is rife whether government will last until its prescribed tenure - five years. The Kisan Board of Pakistan is upset with negative attitude of relevant authorities. The latest is demand for action against black marketing mafia-with relevant hints how to rein in the curse. What comes out of the call needs patience to see call go through.