New cotton crop (August 2015 / July 2016) will start being ginned in at least two factories. One factory is located in Matiari in Sindh and the other factory is reported to be in Khanewal in the Punjab. Three or four more ginning factories may start ginning new crop in Burewala and Sahiwal for which preparations are being made. Reports also stated that seedcotton from Sindh is also being dispatched to Punjab from Badin, Jhudo and Digri etc.
Sowing for the new crop is stated to be better than last season, viz. 2014 / 2015. Thus the new crop in Punjab has made a good beginning. New crop arrivals in small quantities are expected to reach the ginning factories within this week but mills are not keen buyers. According to textile sources, yarn sales are very slow. Thus cotton market is slightly on the downside. Besides Pakistan, Indian textile sales of different items are also not doing well and enquiries are reported to have reduced.
The All Pakistan Textile Mills Association (APTMA) chairman S.M. Tanveer has called the 2015/2016 budget as being "anti-exports" and also anti-spinning. He added that "it will add further to the cost of doing business of the textile industry in Pakistan". He also said that textile exports are declining and the textile units are closing down one after another. In Pakistan, most of the textile sector from yarn spinning to fabric production and finishing are complaining about the federal budget 2015/2016 announced last week and are very critical of the measures announced for the textile trade in the budget. The Pakistan Yarn Merchants Association (PYMA) central Chairman Qaisar Shamas Guccha and his colleagues have bitterly complained regarding the increase in sales tax on yarn and cloth to 3 percent and 5 percent respectively from 2 and 3 percent previously. President of Faisalabad Chamber of Commerce and Industry (FCCI) Engr Rizwan Ahmad also complained that despite Pakistan being the fourth largest cotton producer country in the world, our share of world textile trade of US 1.8 trillion dollars is only one percent which has to be increased.
Generally speaking, the price of current crop (2014/2015) cotton from Sindh reportedly ranged from Rs 4,200 to Rs 5,500 per maund (37.32 kgs), according to the quality. Lint prices from Punjab are said to have ranged from Rs 4,800 to Rs 5,600 per maund.
Specifically 200 bales of current cotton crop from Lodhran are said to have been sold at Rs 4,750 per maund (37.32 kgs), while another 400 bales were said to have been sold by mills to other mills at Rs 5,550 per maund. With textile mills continuing to face a challenging situation, there was no apparent hurry by the mills to buy cotton. Around 75,000 bales are said to remain unsold from the current crop (2014/2015).
On the global economic and financial front, the stocks markets indices fell at the beginning of this week taking cue from the continuing mess and misery being faced by the Greek economy. Most observers felt that the meltdown of Greek finances coupled with its economic misery would not allow the investors any continuing hope for the restitution of the Greek economy.
Thus on the last Monday, many bourses saw their scrips tumble. Moreover, the possibility of raising of interest rates as early as coming September by the Federal Reserve in the United States led to weakening of US and other stocks indices around the globe. This occurred despite a strong jobs report filed in the USA. It was reported that the declines in US stocks "follow three straight weeks of losses, with the Dow and Standard and Poor's touching their lowest in a month."
Reuters continued to report that "the stronger-than-expected jobs data for May (2015) and a pickup in wages were the latest signs of improved momentum in the (US) economy prompting expectations of the rates hike (by the Federal Reserve) sooner rather than later". As a consequence, several stocks prices fell at the beginning of this week including those listed on the Wall Street, Britain's FTSE, other European markets including Tokyo's, Taiwan, Turkey, where also political uncertainty looms large, India and South Africa.
However, around the middle of this week when Germany's chancellor Frau Merkel, France's Francois Hollande met with Greek prime minister Alexis Tsipras and entered into a tete-a-tete in a desperate situation with a view to break up the impasse regarding the repayment schedule of Greece to several private and public lenders, the bourses appeared to buoy their hopes for a more considerate loan returning programme for Greece.
Thus it started to appear that "Grexit", or the Greek exit from the Eurozone may not be as immediate as was being projected over the past several months. There were reports in the Greek media that Greece put forward a request for obtaining a nine-month extension to begin its repayment to its sundry creditors.
News on Thursday quoted the Greek premier as saying that "we agreed to keep looking for a solution". Thus it was reported that Merkel, Hollande and Tsipras had agreed to look for a viable solution not only to keep Greece on board but also to keep the Eurozone on the path to a viable economic recovery. The leaders decided to "intensify" talks to achieve what the European Union has called a "happy ending". It is thus anticipated that a workable programme for Greek debt restructuring will be achieved and the Eurozone will remain intact for the time being. It appears that a round table meeting at the EU-CELAC in the Brussels has finally succeeded to retain the sanctity of the Eurozone.
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