Due to the devaluation of the Pakistani rupee last Tuesday by about four to five percent to about Rs 116 against the American dollar, traders said in Karachi that cotton prices have gone up by about Rs 200 per maund (37.32 Kgs) in the ready market. The Karachi Cotton Association fixed its ex-gin price of grade three cotton higher at Rs 7600 per maund on Thursday.
Though very small quantities of seed cotton (Kapas/Phutti) remain unsold with the growers, on Thursday the prices of seed cotton in both Sindh and Punjab reportedly ranged from Rs 2600 to Rs 3100 per 40 Kgs per 40 Kgs. Brokers said in Karachi that seed cotton equivalent to about 20,000 to 25000 bales (155 Kgs) remains with the growers.
Lint cotton in Sindh was said to be quoted from Rs 6000 to Rs 8000 per maund (3732 Kgs), according to the quality, and in the Punjab the prices of pressed cotton reportedly ranged from Rs 6400 to Rs 8000 per maund, as per quality.
Mills are said to have booked about 3,000,000 bales (155 Kgs) for import from which about 1,500,000 bales have already arrived. Local cotton output during the current season (August 2017/July 2018) is estimated to be about 11.6 million local size bales (155 Kgs). Domestic mills may consume anywhere from 14 to 14.5 million bales. Exporters could ship about 150,000 to 200,000 bales this season (2017/2018).
The new crop (August 2018/July 2019) may be late due to delayed sowing because of low supply of water on the farms. According to traders, there has been increase in the prices of cotton this week due to good demand by mills. Traders said the price of good cotton has gone up by Rs 200 per maund (37.32 Kgs) recently.
The Karachi Cotton Association has increased the ex-gin prices of grade three cotton by Rs 100 per maund (37.32 Kgs) and fixed that Rs 7600 per maund on Thursday.
In ready business reported till Thursday evening, 200 bales of cotton from Yazdan Mandi in Punjab sold at Rs 6500 per maund (37.32 Kgs), while 200 bales from Khanpur and 400 bales from Liaqatpur both reportedly sold at Rs 7900 per maund in a steady and stable market.
On the global economic and financial front, the apparent determination of president Donald Trump to go ahead with imposition of import tariff against China, the European Union, United Kingdom and elsewhere in the world is shaking the confidence of existing arrangements which could conceivably lead to international trade wars as different countries could retaliate and thus bring chaos into the mostly beneficial existing trade arrangements.
In addition to earlier trade tariffs imposed on China, president Trump was reportedly prepared to impose new import duties of around dollars 60 billion on Chinese goods on Thursday. German Chancellor Angela Merkel has bitterly criticized President Donald Trump's proposals to impose new sanctions against Chinese goods which she deems would escalate trade wars globally.
Analysts have determined that should America turn to import taxes on Chinese technology, telecommunications and intellectual properties, there would be a tit-for-tat retaliation by the Chinese authorities.
The fear amongst several observers and analysts is that the imposition of tariffs and counter tariffs between America and China would sooner or later travel to the European Union, Canada, Australia and possibly Japan. The multilateral trade edifice built between the Atlantic nations would ultimately fall apart if China retaliates against the proposed additional tariffs against China in addition the earlier hefty tariffs already imposed by America on Chinese aluminium and steel products.
On last Wednesday, European equities fell due to fears concerning a trade war between the U.S.A. and China which could go global. Similarly on last Wednesday the British shares were reported to have retreated to a new fifteen month low level. Similarly, the Chinese shares also dipped down on last Wednesday.
We may also note that China has again hurled a warning to America that it will retaliate if President Donald Trump goes ahead and imposes new tariffs on Chinese goods worth several billions of dollars. China has clarified in no uncertain terms that it will take all the necessary steps to duly defend its lawful rights and interests. On his part, president Trump has accused China several times on what he calls" unfair trade practices such as currency manipulations".
Despite the proclamation by president Trump that "trade wars are good and easy to win", it is widely believed that trade wars are not only damaging, but they can even become disastrous.
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