Weakness was prevalent on the ready cotton market where some traders informed that lint values have shed between Rs 200 to Rs 300 per maund (37.32 Kgs) within a fortnight. Textile circles informed that cotton yarn prices have also gone down. Moreover, the volume of cotton sales has gone down. According to cotton consultant Naseem Usman, international rates of cotton have gone down so that markets in India and the United States are also weak. One reason for the decline in domestic cotton market is that the custom and excise duties have been withdrawn on imported cotton by the government recently in Pakistan. The current crop size in Pakistan (August 2017/July 2018) is being assessed to be 11.5 to 11.6 million bales (155 Kgs) on an ex-gin basis.
The slow buying activity in the market is being said to be due to the domestic mills policy to wait for the prices to come down. Sindh crop has been mostly harvested with relatively lesser quantity of unsold cotton, but in the Punjab province cotton arrivals are still reported to be continuing. The quality of the remaining cotton in Sindh is said to have gone down.
On Thursday, the 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, while in the Punjab they reportedly ranged from Rs 2800 to Rs 3350 per 40 Kilogrammes.
The price of ginned cotton in Sindh was said to have ranged from Rs 6400 to Rs7700 per maund (37.32 Kgs), according to the quality. In the Punjab, the price of cotton reportedly ranged from Rs 6500 to Rs7700 per maund on an ex-gin basis.
The reason for decline of daily trading activity on the cotton market currently is due to earlier covering by the domestic mills through imports and also from the local market. Therefore, there is no rush to buy cotton by the domestic mills. With the approaching weekend, cotton market is likely to remain slack.
On the ready business side, 400 bales of cotton from Khanewal in Punjab were said to have been sold at Rs7250 per maund (37.32 Kgs), while 1200 bales from Rahimyar Khan were reported to have been sold at Rs7325 per maund in a slack market.
Reports from foreign markets indicated that the upside momentum has been lost in ICE Cotton No. 2 futures contract in New York. Indian cotton prices were also reported to have traded lower during the week on good arrivals. Similarly, reports from China indicated that local markets for physical cotton were under pressure as supply is sufficient and mills are said to be in no hurry to buy cotton presently.
On the global economic and financial front, sundry businesses and bourses are generally enjoying a very prosperous and promising period which many believe may last for a long time in the foreseeable future. However, there are also views which point out the pitfalls which may upset the global economy.
The International Monetary Fund (IMF) predicted at the beginning of this week that the global economy will continue to record a healthy growth during the current year (2018) and also next year viz. 2019 but performance in such areas like the Middle East, North Africa, Afghanistan and Pakistan will remain subdued.
Regarding the emerging and developing economies of Asia, the economic growth will be better. Even economic growth in China is seen as moderate. India, however, is seen to pick up economic growth from 6.7 percent in 2017 to 7.4 percent in 2018 and 7.8 percent during 2019.
However, there are other primal and potential fears which may subdue the current euphoric and record rise in the global economy. The key issues which may hinder or upset the rapid rise in the global economy include the maldistribution of wealth between the various sections of society, the Trump initiative and design at deglobalisation of the world economy, the setback to climate change programme which is also being opposed by President Donald Trump under the slogan of "America First".
In this regard, Americans may try to calm down the global fears and anxieties that America only wants to defend the interests of the United States and not to unsettle the existing global free trade mechanism. Earlier, it was reported that Germany and France had decided to "defend a liberal world (trade) order "which has been built over the past five or more decades. These issues are likely to be thoroughly discussed and debated at the ongoing economic summit at Davos in Switzerland.
Therefore, the crux of the problem concerning the continuing global economic growth is that the leaders of Europe are collectively preparing a warning to America through its visiting president Donald Trump who has arrived at Davos that by adopting nationalism it would hurt free world trade immensely. The solution appears to be to defend and keep each and every country's" legitimate interests intact by promoting free trade but not allowing or promoting unwarranted trade barriers.
In this regard, Frau Merkel, Chancellor of Germany, referred and recalled that "nationalism ignores the lessons learned from the great conflicts of the 20th century", mainly the horrendous world wars. Frau Merkel reminded the people in Davos that perforce the outcome of the World Wars during the previous century was the need to cooperate with each other and shun isolationism. A similar message was also given in Davos by the President of France Emmanuel Macron by stressing the significance of globalisation and international cooperation to promote healthy and equitable growth.
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