Extended holidays stretching from Friday to next Monday (From 26th to 29th of October, 2012) dampened apatite for cotton on Thursday as closures and transport problems have practically shut down the cotton market. There was mostly calm hanging over the cotton market because of the Eid-ul-Azha holidays where the tone of cotton prices was quiet to steady in a nearly non-functional session on Thursday.
The seedcotton (kapas/phutti) prices in Sindh reportedly ranged from Rs 2400 to Rs 2700 per 40 Kgs, where as in the Punjab the notional prices lingered between Rs 2400 to Rs 2700 per 40 Kilogrammes. Lint prices were also static in the range of Rs 5,550 to Rs 5,800 per maund (37.32 Kgs) in Sindh, where as in the Punjab they reportedly ranged from Rs 5,500 to Rs 5,800 per maund with no credible reports being available for any ready sales till the evening.
Crop output ideas for the current cotton season (2012-2013) range from 14 to 15 million domestic size bales on an ex-gin basis from which the mills may consume between 14 and 14.5 million bales. Exporters may ship from half a million to one million bales while imports may range from one to 1.5 million bales. If 15 million bales production is achieved, Sindh may be delivering about four million bales while the input of Punjab should be close to eleven million bales.
Over the past many months, China has been a regular buyer of Pakistani yarns. In fact, fabric business with China has also been considerable. With more supply of domestic power and gas, the earnings of the Pakistan textile industry could improve substantially which are presently at hold due to the short and intermittent supply of these utilities. In fact, the Pakistani textile industry also has the necessary acumen to expand and modernise its capacity provided gas and power supply to industry is made regularly.
Cotton futures prices on the New York exchange (ICE) have mostly been ranging from 70 to 77 cents per pound since the past many months looking for a definite direction. One reason for the persisting higher range of cotton futures prices was due to the perception that not adequate output from the current crop is tenderable, and thus the cotton prices are resisting a decline. On the other hand, an abundance of supplies has contributed to ample fibre supply on the global market. Any improvement in micronaire value of US lint could topple fibre prices to lower levels.
The Karachi Chamber of Commerce and Industry held a Brainstorming Session on 20th October, 2012 with attendance from a wide array of businessmen and several Business Chambers, Market Associations of Karachi, the Citizen Police Liaison Committee. The attendees unanimously decided that the prevalence of kidnapping for ransom, street crimes, extortion by phone or written slip, abduction of goods vehicles and snatching of cars, motorcycles and mobile phones has increased alarmingly but the concerned authorities have failed to stop these activities.
Therefore, the meeting decided to display protest banners in Karachi, file a petition in the Supreme court for implementation on the orders of the Supreme Court in the suo moto law and orders case of Karachi, hold a peaceful sit-in (Dharna) on the 3rd of November, 2012 at the Governor's and Chief Ministers houses simultaneously and hold a complete strike / closure of business and industry together with sundry markets with their shutters down on 10th of November, 2012. The meeting has pleaded with the citizens and concerned persons to participate in these protests for the sake of achieving peace and protection of life and property in Karachi.
On the global economic and financial front, stocks prices on most bourses on both side of the Atlantic fell after fears that Spain would request for another bailout. Similarly, the prices on all Asian shares markets went down uniformly on sinking of the Spanish economy. It was thus clear that recession has tightened its grip on the Spanish economy. Many if not most of the commodity prices had also earlier retreated on reports of continuous economic strains in the global economy.
Hitherto unaffected by the global economic undown, Germany is also now facing an adverse situation in its economy. Reports on Wednesday (24 October, 2012) indicated that profits at the giant Volkswagon Company fell for the third quarter as it became clear that the depressive sickness of Europe has also caught on with the German carmakers. Thus, instead of the positive economic turnaround anticipated in Europe and beyond, it is now turning into a nightmare.
Earlier in the week, corporate earnings in the United States had already painted a dismal picture. A weaker economic performance has already depressed business sentiment around the world over the previous many months. In other news, the so-called "flash crashes" on the electronic stock markets were being suspected of creating undue volatility which unfortunately proliferates to other equity markets around the world.
In the United Kingdom, the recently held Olympic and the Paraolympic games instilled a sense of optimism and some quantity of economic gains to the national economy, but it can only remain positive for a brief period of time as the underlying sickness in the British economy cannot be wished away. As and how euphoria of the Olympic games subsides, we are sure to witness a triple dip recession in Great Britain. It remains essentially certain that as long as the eurozone remains under duress and the United States continues to flounder with its shaky economic condition, the global economic situation cannot regain its strength and vitality.
The political tiff arising out of disputed islands between China and Japan are undermining the world's third largest economy, namely Japan, in a substantial way. As a consequence, the demand for Japanese goods is reported to have fallen dramatically. Moreover, a weaker economic performance in China is depressing the business sentiment all around the world.
Though Greece is reported to have gained a breather as its creditors like the European Union (EU), the International Monetary Fund (IMF) and the European Central Bank (ECB) allowed Greece more time to somehow remedy and rehabilitate its nearly sunk economy, but it looks very unlikely that it will be able to extricate its dilapidated economy anytime in the foreseeable future. It may be recalled that Greece is facing its sixth consecutive year of recession and is thus said to be seeking a new quantum of loans from the trio of creditors viz the EU, the IMF and the ECB. These events and evaluations hardly speak of any early restoration of the global economic condition.
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