Easy tendency on cotton market

The domestic cotton market turned weaker at midweek following an announcement by the Plant Protection Development after a meeting with the domestic mill owners regarding certain conditions under which imports of cotton will be allowed into Pakistan. Thus the domestic textile industry has started negotiations to import cotton from India at 79 to 79.50 cents per pound which has depressed the local lint prices.
Furthermore, Friday is a religious holiday in Pakistan so that a longish weekend has also depressed domestic prices since the middle of this week. Business volume has declined notably and is likely to resume from the beginning of next week in a normal way. Thus on Thursday seed cotton (Kapas/Phutti) prices in Sindh were said to have ranged from Rs 2800 to Rs 3300 per 40 Kgs, according to the quality. In the Punjab, seed cotton prices reportedly ranged from Rs 2800 to Rs 3450 per 40 Kgs on Thursday.
Cotton prices in Sindh are said to have ranged from Rs 6200 to Rs 7000 per maund (37.32 Kgs), while in the Punjab they reportedly ranged from Rs 6500 to Rs 7000 per maund on Thursday, according to the quality. Thus an easy tone prevailed on the ready cotton market due to the aforesaid announcement of the Plant Protection Department and also the extended weekend holidays. In the meantime, little or no business may transpire on Saturday as the mills are said to have adopted a wait and see policy.
According to brokers in Karachi, in ready sales of cotton 200 bales of cotton each from Bahawalpur and Yazman Mandi, both in Punjab, sold at Rs 6600 per maund (37.32 Kgs) in an easy market. Brokers added on Thursday that this year's (August 2017/July 2008) cotton production in Pakistan could range from 11.0 to 11.5 million bales (155 Kgs) on an ex-gin basis. Yarn prices were also said to be somewhat lower on Thursday.
According to another broker, lint prices in lower Sindh were around Rs 6300 per maund (37.32 Kgs), while in the Khairpur district they were about Rs 6500 per maund. Low sales appeared to show that most mills were interested in buying better quality of cotton.
On the global economic and financial front, the equity markets in the United States have seen their most successful year during 2017 in stock market history. A report from CNN analyst Matt Egan, however, advises caution because such a climb of share values in America to dizzy heights "could signal trouble down the line". Moreover, equity markets in other places like the European Union and elsewhere are also bubbly. The report continues to state that such a high valuation of stocks, bonds and credit is more expansive than at any time since 1990.
Many financial analysts and observers have cautioned investors that such roaring times will eventually come to an end and a bear market would replace the current euphoria in the stocks prices. Some analysts already see a top-heavy market which would sooner rather than later start slipping momentously.
No doubt several countries around the world have made remarkable progress since the great recession in 2007/2008, but some observers already surmise the approach of a recession over the next one or two years. To the above calculations indicating large gains in several economies around the world, the prices of scrips, however, have overshot the gains massively. Analysts are also warning the investors that in case of a recurrence of a Great Recession similar to the one during the 2007/2008 period, the central banks including the Federal Reserve in the U.S.A. will have essentially exhausted their means and the wherewithal to stimulate growth to rescue the investors who would restart the faltering economies.
Moreover, the turbulence in the Middle East, the growing refugee problems as in Europe or with the Rohingyas in Myanmar and widespread problems of corruption in many countries around the world are highly detriment to socio-economic problems. Added to the mechanics of investment, finance and stimuli to reboost the economies around the world would be a need of a politically stable world which existed for about half a century following the Second World War. However, the current century started with the toppling of the two trade towers of the World Trade Centre in New York.
No doubt the equity indices in New York are hovering at record levels and the European Union indices are also maintaining high levels, but there is no place for complacency. Although the German economy is going through a very strong phase of success, but political instability there is a negative factor. However, hopes have risen again that Frau Merkel will again be able to form a stable and workable government. The current situation needs to heed the advice of the Organisation for Economic Cooperation and Development (OECD) which has "urged governments to do more to ensure long term growth and better living standards across the board".