Good local demand for cotton

After a hiatus of nearly one week of Eid-ul-Fitr and weekly holidays, the cotton market showed a steady to tight condition on Thursday. Recent gains over the previous days on the New York cotton futures market (ICE) and tightness in the commodity complex, particularly in soyabean and corn, incited cotton to also join the bandwagon leading to a feeling of verve and vivacity.
Though lint prices on the domestic market have gained about Rs 100 to Rs 150 per maund (37.32 Kgs) over the past couple of days, sale volume remained moderate. Some rains fell in such Punjab stations as Sahiwal, Chichawatni and Mian Channu and it also drizzled in some areas of Sindh. Weather was also cloudy in other parts of the cotton belt perhaps signifying that the monsoon season lasts till September. Reported arrivals decreased creating a supply gap which helped in strengthening the cotton prices.
The quality of Sindh cotton is said to be exceptionally good while Punjab cotton is also providing steady quality. Some say that crop is late and also fear that it could be below the target. Others say that arrivals are lagging but that the deliveries could catch up later on. Anyhow there is good local demand for cotton.
Cotton output during the current season (August 2012 - July 2013) could range from 14 to 15 million domestic size bales against last season's (2011-2012) production of 14.8 million bales on an ex-gin basis. Consumption this year may range from 14 to 14.5 million bales, while exports may extend from half a million to one million bales. Imports may range from one to 1.5 million bales.
Exporters are also showing moderate interest to deal with cotton enquiries from India, Bangladesh and Vietnam. Yarn business is said to be normal and overall textiles are doing relatively well. Regarding raw cotton, prices are steadily held at present but it is felt that on a longer term basis the cotton prices can go lower. There is ample cotton presently floating around the global markets or will arrive soon.
On Thursday evening, seedcotton (Kapas/Phutti) prices ranged from Rs 2,600 to Rs 2,650 per 40 Kgs in Sindh, while in the Punjab they reportedly ranged from Rs 2,600 to Rs 2,700 per 40 Kgs in a steady market. Lint prices in Sindh and are said have ranged from Rs 5,900 to Rs 5,950 per maund (37.32 Kgs) as per quality, and in the Punjab from Rs 5,900 to Rs 6,000 per maund.
In Sindh styles, nearly 6,000 bales of cotton from such diverse stations as Tando Adam, Shahdadpur, Sanghar, Mirpurkhas, Hyderabad, Kotri and Khipro sold from Rs 5,900 to Rs 5,925 per maund. In the Punjab, 200 bales of cotton from Bahawalnagar, 400 bales from Bhakkar and 500 bales from Harnuabad, all sold at Rs 6,000 per maund. On the global front, slump in Chinese textile industry where stocks are piling up and the specter of record world stocks of cotton point to a bearish appearance in the long term period.
On the global economic and financial front, the name of the game continues to remain procrastination, muddle-headedness and sleight of hand. It is now more than two years that the grand leaders of Germany, France and the United States, with a helping hand from the United Kingdom, are tackling the Eurozone Crisis, but to no avail. All their vague ideas and ambiguous proposals have only helped to further the downward trajectory of the peripheral southern economies of the zone including Greece, Spain and Portugal.
Be that as it may, besides that economic sickness of Italy, Iceland, Ireland, Cypress and the likes thereof, the canker of the economic malaise has now positively hit not only France, but also Germany. German manufacturing and exports are already showing symptoms of a sluggish movement slowing down the economy. Now the Organisation of Economic Co-operation and Development (OECD) has pronounced that most of the major economies of the world are slowing down. Even Japan and the United States are said to be showing signs of a fading growth momentum.
On another news item emanating from Washington, it has been reported that the budget analysts of the United States Congress said on past Wednesday that the existing policies proposing to cut the budget deficit from January 1, 2013 will plunge America into a recession and consequent increase in unemployment.
After deliberations over the past couple of years by the parties concerned, Greek Prime Minister Antonis Samaras is again asking for more time before be puts all the harsh bailout terms hurled at Greece into practice. He is travelling to Berlin to meet Frau Angela Merkel and later to Paris on Saturday to see French president Francois Hollande to seek more time to implement the harsh bailout terms. Frau Merkel has reportedly said that any relaxation in the bailout terms given to Greece can only be considered if they are within the scope and ambit of the agreed formulae.
Besides these difficulties, Japan's exports again slumped in July, 2012. The world is now also losing hope in the contention that more loans will cure the global economic sickness. Can a moratorium on loans do the trick and salvage the wayward economies which abound around the globe? Now the competence of global leaders is under trial as millions of people are turning skeptical regarding the efficacy and competence of their leaders. Amongst other ills, inflation, unemployment, crisis in the global banking system and lack of economic growth have now become patently manifest.
Thus while Greece continues to ask for more cash week after week, month after month, to avoid another default, the customers of government held banks in the United States, the United Kingdom and Europe are said to be shifting their capital to the Middle East and countries like Malaysia and Singapore. With Japan's trade balance sliding, reasion in the Eurozone and a sluggish American economy, how can laggards like Greece, Spain or Italy revive their fortunes? Patience is getting thin with the Greek economy while a significant contraction of the Eurozone manufacturing sector is casting further gloom on the global markets.