The International Cotton Advisory Committee (ICAC) has projected that due to large supply of cotton on the international market, lower prices of world cotton will persist during the 2014-15 season. Both China and India are expected to have large harvests this season while in Pakistan the current crop is projected to yield normal output as the damage due to rains and floods has been described as being minimal.
With abundant cotton on tap from all the leading global suppliers and restrictions on cotton imports by China to be implemented by announcing that it will not provide additional quota in 2015, global lint prices will be under restraint. With the new Pakistan cotton crop of an estimated amount of 14 million bales (155 Kgs) mostly intact and quality also improving, prices continue to be constrained at lower levels. Eid holidays scheduled from 6th to 8th of October already nearing, domestic market activity has reduced.
With local lint prices under pressures, various groups of growers throughout the country are calling for the government to support seed cotton prices to assist the agriculture community. Seed cotton (Kapas/Phutti) prices are said to have suffered a decline of Rs 200 to Rs 250 per 40 kilogrammes. Lint prices reportedly decreased by Rs 200 to Rs 300 per maund (37.32 Kgs) this week, while yarn prices are also said to be weak. Thus a bearish outlook pervades the domestic cotton and yarn markets.
On Thursday, seed cotton prices in Sindh were said to have prevailed from Rs 2300 to Rs 2450 per 40 Kgs, while in the Punjab they reportedly ranged from Rs 2200 to Rs 2450 per 40 Kgs, according to the quality. Lint prices in Sindh were said to have ranged from Rs 5000 to Rs 5250 per maund (37.32 Kgs), while in the Punjab they reportedly ranged from Rs 5150 to Rs 5300 per maund in a weak market. Textile mills are also mostly not satisfied with their performance.
Sale of 2,000 bales of cotton from lower Sindh was reported at Rs 5000 / Rs 5050 per maund, while sale of 2,000 bales of cotton from Upper Sindh was reported at Rs 5200 per maund. The following were elected to the Executive Committee of Karachi Cotton Association (KCA) for the year 2014 / 2015 : Amin Hashwani, Chairman, Asif Bashir, Senior Vice Chairman, Shahid Shafiq, Vice Chairman, Ahmed Ebrahim, Amir Javed, Anwar Haji Karim, Asif Inam, Fayyaz Umer, Ghulam Rabbani Khiliji, Imran Maqbool, Muhammad Khalid, Naser Wahab, Sohail Nasim, Sohail Wali, Waqas Anwar, Zahid Mazhar and Khawaja M. Zubair (Ex-officio Member).
The following were elected to the Executive Committee of the All Pakistan Textile Mills Association (APTMA) for the year 2014 / 2015, S.M. Tanveer, Chairman, Amanullah Kassim, Senior Vice Chairman, Mian Wisal A. Monnoo, Vice Chairman, Sikandar Kuli Khan Khattak, Vice Chairman, Sheikh Muhammad Akbar, Zahid Anwar, Abdul Rahim Nasir, Naveed Gulzar, Mahmood Ihsan, S. Anjum Zafar, Faiq Javed, Shahid Faraz, Khawaja Muhammad Anees, Zahid Rasheed Khawaja, Imran Maqbool, Sohail Yunus Tabba, Zahid Mazhar, M. Jamil Qassim, Fawad Anwar, Tariq Saud, Shams Rafi, Khurram Inam, Saleem Shakoor, Afan Aziz and Muhammad Yasin Siddiq (Ex-Officio Member).
On the global economic and financial front, various problems from different parts of the world ranging from large business and banking setbacks to political, climate change and religious insurgencies in the Middle East and African countries are continuing to plague the world's economic situation. In fact, economic problems are multiplying with no clear cut or viable solutions emerging towards resolve the issue of the global depression which appears to be moving to an increasingly intractable path.
This week the ongoing Eurozone crisis which started in 2009 seems to be getting more painful and penurious for its people. The Eurozone crisis started in October 2009 when the world learnt the Greece has a massive and intolerable deficit in its budget. Then the same sickening economic situation traveled to Spain, Portugal and Ireland, only later hitting the coffers of Italy. Then the malaise reached the core countries of France and Germany which are presently highly uncomfortable in confronting what has struck the very basis of the European economic makeup.
The prescription offered to the people of the peripheral Eurozone countries for its economic rehabilitation was a high dose of austerity measures. The austerity measures turned out to be an utter disaster. In fact, according to the celebrated economist Joseph Stiglitz, a Nobel laureate, all the suffering in Europe is the result of a "manmade artifice", the Euro.
The most glaring and fundamental issue hurting the Eurozone today is deflation. The deflation presently prevalent in the Eurozone is hauntingly scary. The latest news came this week from both France and Italy where both countries have discarded the European Union limits within which they were to reduce their borrowings. Now they propose to reduce their borrowings later on in order "to ease the pace or painful deficit - reduction steps to try to counter another year of recession". In brief, the Eurozone remains in deep economic trouble.
Red was splashed over all the boards displaying equity prices around the world at midweek as worries over global growth were widespread, ranging from the United States and the United Kingdom to Germany and China, besides Europe, India, Taiwan and South Africa. Besides decreasing demand of factory goods reported from Asia and Europe, factory growth in the United States has also lost momentum. There is also a serious sense of premonition that the last quarter of 2014 is likely to drift downwards. Besides the economic drag-down on the global economic horizon, geopolitical worries like the protests in Hong Kong, the air strikes on IS and the Ebola case having landed in America is sending shivers to several investors.
Last not least, this week the International Monetary Fund (IMF) has warned that "shadow banking" has spread its tentacles widely around the global banking system. Indeed more than dollars 70 trillions are being handled by the shadow bankers which lacks adequate regulation. Thus, this week more causes for concern have emerged which threaten the health of the global economics.
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