Despite sharply declining unsold cotton stocks available on the ready cotton market, the tone of lint prices remained easy on Thursday. Till the evening, sales of 400 bales of cotton from Sakrand in Sindh were reported at Rs 5500 per maund (37.32 Kgs), while 2100 bales from Chundko, also from Sindh, were said to have been sold at Rs 5522 per maund.
In another report, 2000 bales of cotton from the 2014 / 2015 crop were sold by the Trading Corporation of Pakistan (TCP) at Rs 5810 per maund ex- Karachi. Domestic mills are reported to have imported 50,000 tons of cotton from West Africa over the past six weeks at prices lower than the prevailing domestic prices. The ready cotton prices of the current crop (2015 / 2016) from Sindh are said to have ranged from Rs 5000 to Rs 5800 per maund (37.32 Kgs). In the Punjab, cotton prices reportedly ranged from Rs 5200 to Rs 5800 per maund, according to the quality. The turnover of cotton sales was described as being slow.
Most leftover cotton from the current crop is of average to below average grades. Barely 125,000 to 150,000 bales (155 Kgs) are reported to remain unsold from the current crop. New crop cotton (August 2016 / July 2017) is likely to start arriving in commercial quantities in July 2016.
Sowing of the new crop of cotton (2016 / 2017) has being slow and sown areas are also said to have decreased. Low realisations by the growers, loss of acreage to better paying crops like sugarcane and maize and dull conditions prevailing in the Pakistan Textile industry are discouraging the farmers to grow more cotton. Cotton growers need to be provided more incentives to increase their viability to grow more cotton.
High costs of inputs like seeds and fertilisers, mixing of seed varieties of cotton and lack of cotton zoning are also said to be responsible for a very low output of cotton during the current season (August 2016 / July 2017).
The decline of cotton output this year (2015 / 2016) is very critical to the overall economy of Pakistan as nearly one third output of cotton has been wiped off leaving a dismal production of only about 9.8 million bales (155 Kgs) against last years (2014 / 2015) output of 14.8 million bales.
On the global economic and financial front, the main topic this week concerned the possibility of a rise in interest rates which have been kept between 0.25 percent and 0.5 percent by the US Federal Reserve since the beginning of the financial crisis in 2008. While low interest rates could help consumers and sundry investors, they have not helped the bankers whose bread and butter - indeed their mainstay - is paying interest to depositors and in turn lending the accumulated money to prospective investors who pump it into the economy. Also discussed widely was the possibility of Britain leaving the European Union through a referendum in coming June (2016), which would have much of Continental unity in disarray. The International Monetary Fund (IMF) has described "Brexit" as being "bad to very bad".
The colossal fires in the Canadian forests, most particularly the Fort McMurray wildfire of the current year (2016) this month have pushed crude oil prices above fifty dollars a barrel. Traders in the crude oil market say that these fires resulted in a loss of 1.2 million barrels of oil a day over the past fortnight. Thus the volatility in the crude oil market has increased and also inculcated uncertainty in the normal flow of oil around the world. Due to the uncertain nature of the crude oil market, Moody's has downgraded the credit standing of Saudi Arabia, Oman and Bahrain.
The mass flow of immigrants from north Africa and the Middle East is growing dangerously, particularly from Syria, Libya and Iraq, and the Europeans at large are becoming increasingly skeptical and fearful of this problem. The number of refugees from Libya alone has tripled. It is now contended that many of the immigrants are not refugees and different middlemen are promoting illegal transfer of people into Europe which would be highly problematic and possibly dangerous. However, it may be noted that all attempts to control the influx of refugees into Europe have failed. Smuggling operations could not be controlled by the EU and have been a failure.
The situation of refugees crossing over from Libya to Europe is full of multifarious problems and the European Union could even face an uprising pertaining to the refugee crisis. Besides creating misery, the refugees problem in Europe is fraught with dangerous ethnic and social ramifications which could easily get out of control.
On its part, the International Labour Organisation (ILO) has declared that a growing number of Europeans are living in "relative poverty. Reports from Geneva added that world-wide unemployment is threatening to undo the progress made to raise the living standards of people in the middle - income countries. It is thus perceived that the global economy is continuing to deteriorate while the fiscal and monetary problems are multiplying.
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