Tight condition was observed on Thursday continuing the firmness in fiber prices since the beginning of this week. With seedcotton (Kapas / Phutti) arrivals slowing down, New York cotton futures (ICE) maintaining a firm disposition and textiles generally doing well, fiber prices continued to maintain a steady stance. Most ideas in Pakistan now put the size of the crop lower than originally anticipated.
Total output of cotton for the current season (August 2012 - July 2013) is now estimated between 13 and 13.5 million domestic size bales (mostly presumed to be an average of 155 Kgs per bale) on an ex-gin basis. Pakistani mills are projected to consume between 15 and 16 million bales during the season. Exporters may ship about half a million bales while mills may import from two to 2.5 million bales during the season.
The rates of seedcotton (Kapas/Phutti) were steadily held on Thursday. In Sindh, they prevailed from Rs 2,200 to Rs 2,800 per 40 Kgs according to the quality, while in the Punjab they extended from Rs 2,200 to Rs 3,300 per 40 Kilogrammes. Lint prices in both Sindh and Punjab are said to have ranged from Rs 5,300 to Rs 6,500 per maund (37.32 Kgs) according to the quality. With reports that power supply will be made available in Punjab in larger quantities, spinners may increase their yarn output as its demand remains strong and prices mostly tight.
The Chinese will be celebrating their Lunar New Year from the 8th of February 2013 up to the 17th of February 2013 and are scheduled to resume work on the 18th of February 2013. We wish them a happy New Year. There will thus be an extended period of closure in China but business is expected to continue its buoyancy after the New Year holidays.
Brokers reported from Karachi that ginners were mostly sitting tight over whatever remains of the higher grades cotton from the current season. However, occasional sales of lower grades lint continue periodically.
Brokers reported in the evening that 400 bales of cotton from Khairpur in Sindh were sold at Rs 6,300 per maund (37.32 Kgs), while 600 bales from Gojra in Punjab sold at Rs 5.950 per maund in a tight market. On the global economic and financial front, the week started with high hopes that better earnings, improvement in employment figures and rise in some manufacturing data would provide a turn around leading to a positive direction. However, soon it was realized that sizeable political problems in Spain and Italy will be a big drag on the economic misfortunes of the Eurozone.
Thus it has been reported that fears of the zone's debt are emerging prior to an impending meeting of the European Central Bank and are negatively symptomatic of the underlying economic malaise which refuses to go away. The underlying sentiment of the Eurozone economy continues to remain chronically weak.
Both Italy and Spain, Europe's third and fourth largest economies are presently confronting serious political problems which are rattling the Eurozone's integrity. In Italy, concerns were said to have been expressed over the re-election of former Prime Minister Silvia Berlusconi over the coming couple of weeks or so. The Euro is suffering a setback of sorts due to an alleged malfeasance involving an Italian bank which scandal could spill over the forthcoming Italian elections. The general elections scheduled in Italy latter this month is pressurising the euro negatively.
In Spain, cost of borrowing money has risen again following the allegations against the Prime Minister Moriano Rajoy that he received money from a slush fund. Rajoy has denied any involvement in such a fund. Be that as it may, investors are wary of the repercussions of these allegations which could lead not only to a lowering of the value of the Euro, but could add to the seemingly unending political and economic problems of the Eurozone. Anyhow, the populace in Spain continue to demand the resignation of prime minister Rajoy, come what may.
Even elsewhere, there are still several weak spots in the global economy which preclude an early recovery because of the interlocking fortunes of a globalised economy. For instance, retail sales in the United Kingdom rose remarkably in January 2013, but fears persist that the underlying weaknesses of the UK economy are too fragile to warrant an early improvement. On last Wednesday, pound sterling hit six-month low against the US dollar.
Even otherwise, several key spots around the world are still facing stiff odds against their economic uplift. Besides steep fall in pound sterling as UK economic woes continue, the volatility of British business condition remains a serious issue. Another interesting news concerns the accusation of the United States Justice Department against the rating agency Standard and Poor's of fraud charging it with inflating the ratings of mortgage bonds before the 2008 financial crisis resulting in about dollars five billions losses to the federal insured institutions. Thus even though the world's shares prices on several bourses have rose sharply since the past five years, the fundamentals of the global economy are still creaking.
Comments
Comments are closed.