Cotton rates in Pakistan have been rising continuously since last week or ten days. The prices of higher grade lint have moved up by Rs 500 to Rs 600 per maund (37.32 Kgs), while the rate of lower grades increased by Rs 300 to Rs 400 per maund. With the availability of current crop (August 2011-July 2012) decreasing day by day and the quality of lint also going down, some ginners are holding on and even asking for higher prices for their premium cotton.
Yarn prices are also better and raw cotton exporters are also in the market for short covering and also for moderate sales of new quantities. It is estimated that the domestic exporters may have picked up upto 10,000 bales of cotton over the last week or ten days. Some exporters are even said to have bought at Rs 6,000 per maund of cotton.
Textile industry sources added that Pakistan is presently most competitive in exporting coarse and medium counts of yarns. On the cotton front, new crop (August 2012-July 2013) has been reportedly delayed by about one month on account of cold weather which was prevailing in the previous months at the time of sowing in the early crop areas. However, some early grown cotton from the new crop may start arriving in July 2012, but commercial quantities of cotton may start arriving from September, 2012 onwards. Output of next cotton crop may go up to 17 million domestic size bales subject to conducive weather.
Seedcotton (Kapas/Phutti) prices have gone up by Rs 100 to Rs 200 per 40 Kgs over the past one week. Seedcotton prices in Sindh are said to be ranging from Rs 1800 to Rs 2350 per 40 Kgs, while in the Punjab they were also reportedly prevailing higher from Rs 2,200 to Rs 2,700 per 40 Kilogrammes.
Lint prices were very tight and reportedly ranged from Rs 4,500 to Rs 6,000 per maund (37.32 Kgs) in Sindh, while in the Punjab they were said to have ranged from Rs 5,200 to Rs 6,200 per maund.
Mills are importing a modicum of cotton from a few origins but Brazil remains in the limelight. Odd lots are also reported to have been picked up from U.S.A. (MSF/EA) or Ivory Coast in West Africa but the volume is very low. Enquiries are also being received for some Nigerian cotton. Thus the import activity of cotton has improved slightly. Most mills are buying on a hand to mouth basis due to strong vulnerabilities on both the macroeconomic front as well as on the commodity complex.
On the global economic and financial front, some buying occurred on the global equity markets in U.S.A, the U.K. and Europe after having declined for about five previous days. Rise in ALCOA prices in America and positive remarks by brokers in the U.K led the rise as short covering and bargain hunting also propped up the equity prices.
However, one may not lose sight of the fact that over past one week or so the equity markets almost every where were sinking amidst obvious gloom. Following last week s weak economic data from U.S.A, FTSE 100 in Britain plunged on last Tuesday to surrender all the gains it had made in 2012. European shares in general fell to a three month low level on perception that global growth was sinking and that several European countries including Spain, Italy and Portugal were slipping downwards amidst mountains of debts which are clearly unsustainable.
In Japan the Nikkei shares average fell for a sixth straight day on last Tuesday recording its longest losing streak since July 2009. Shares in Seoul in South Korea also surrendered their earlier gains on last Tuesday extending a one month closing low set in the previous session. The Hong Kong shares also slid to a month and half low on fears of negative economic data in the United States and higher than expected inflation in China.
In France, the economy reported no growth in the first quarter and there appear no signs or signals that it could do any better in the foreseeable future. Unemployment figures continued to rise in France and may reach higher levels next year.
In Japan, Sony Corporation has decided to cut 10,000 jobs which would be a hefty six percent of its working force. Weak demand for Sony Televisions and intrusion by new gadgetry for savvy kids and consumers has dented sales.
With this dire data on the block, Federal Reserve Chairman Ben Bernanke was constrained to declare recently that the financial problems of the world are by no means over and could prolong further into the future.
However, fractured global policies and programmes by the world leaders are leading nowhere. The global economic policy for rehabilitation and the resurrection of the battered financial system are not moving anywhere as they are rudderless and lack a unified direction. Leaving all possible solutions for resurrecting the global economic megamess to the U.S.A or China alone will take us nowhere. We need a universal and unified approach by all the stakeholders around the world including the U.S.A, China, the BRICS and all the others from different regions to again put together and resurrect and world-wide economic formulation without further loss of precious time. Working in fits and starts will take us no where.
We have already seen, for instance, that the economic therapies for Greece, Spain, Portugal, or Italy and France for that matter, are taking us no where despite all the props and prescriptions of the Eurozone leaders. Till more viable and valid solutions to the global economic malaise are forthcoming, we will keep drifting towards the slough of despondency.
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