Cotton market remains tight

During the last three or four days cotton prices have increased in the ready cotton market. The Karachi Cotton Association has increased its ex-gin prices for Grade 3 cotton by Rs 200 per maund (37.32 Kgs) over the past few days. Thus the tone of the domestic cotton price has become steady to tight this week.
The price of seed cotton (Kapas/Phutti) in Sindh is said to have ranged from Rs 3700 to Rs 3900 per 40 Kgs, according to the quality. The price of seed cotton in Punjab on Friday reportedly ranged from Rs 3500 to Rs 3800 per 40 Kilogrammes.
Lint cotton prices in Sindh ranged from Rs 8150 to Rs 8200 per maund. Punjab cotton is said to have ranged from Rs 8300 to Rs 8400 per maund (37.32 Kgs), depending on the quality. Brokers added that now more and more ginning factories have begun to press cotton but arrivals of seed cotton have not increased commensurately. Traders said that several mills continue to buy from Sindh as supply of lint cotton in Punjab has not increased according to the demand.
Brokers added that yarn prices are not doing well and thus some mills are not faring well. In the meantime, the International Cotton Advisory Committee (ICAC) has stated that the global cotton stocks are projected to decrease by 10 percent during the 2018/2019 season.
According to the ICAC, global cotton production is projected to decrease buy 3 percent to 26 million tons. On the other hand, cotton consumption is projected to increase by 3 percent to 27.8 million tons. However, global stocks of cotton are expected to decrease by 10 percent to 16.9 million tons. Moreover, stocks in China are poised for decline of 23 percent to 6.6 million tons. One may surmise that with growing mill use in China, the possibility of increased imports of cotton during the 2018-19 season are expected.
While official circles are projecting the domestic output of cotton in Pakistan for the current season (August 2018-July 2019) to exceed 14 million bales (170 Kgs), private sector sources are projecting the cotton output during the current season to range from 11.5 to 12 million bales (155 Kgs).
On the global economic and financial front, the fear of a backsliding on the global equity markets has escalated sharply. More and more analysts and observers on the leading bourses around the world now feel that several share markets around the world are now showing an unmistakable uneasiness.
From Argentina to South Africa and from Turkey to China, economic gloom is spreading widely around the world. To begin with, it was believed that Turkey, Spain or Mexico were the weaklings as their economies appeared to be wobbling. Now the emerging markets are looking sicker than what was perceived earlier. Moreover, the virus of economic sickness seems to be spreading widely and speedily around the globe.
Besides the fear of economic sickness spreading quickly and widely around the globe, the loud thinking about the possibility of the impeachment of President Donald Trump as being reported by media is also threatening the stability of the stock markets around the world.
Global stock markets are getting sicker week by week from Indonesia to India. The economic turmoil in Venezuela, Mexico, Turkey and Argentina is lurching unmistakably towards Asia and the contagion could easily spill over to the other continents. Lest we forget, today we are living in a globalize world so that a downturn in one country could easily spread to other countries.
Surely the economic sickness in one country would sooner or later spread the contagion to other parts of the world. The chief of the International Monetary Fund (IMF), Christine Legarde, has observed many times in the recent past that the "global economic outlook is darkening by the day". She added that "clouds over global economy are darker by the Day". She further added that rising protectionism could undermine confidence. In fact, the risks to the global economic instability are rising as leading industrial nation are increasingly exchanging threats of a trade war.
IMF has earlier also declared in no uncertain terms that the trade tariffs which are being imposed by President Trump are not only a threat to America itself buy they are destabilising the global economy. Thus this week the increasing threat to the global economy has resulted in sharp falls in equity values on many bourses around the world.