Conditions were little changed on the cotton market when it re-opened on Thursday after long Eid holidays, relevant sources said on November 20, 2004. The spot rate opened unchanged at Rs 1920 but on Friday rose by Rs 25 to Rs 1945. On Saturday, the spot rate dropped by Rs 20 to Rs 1925.
WORLD SCENARIO: In New York trading spot December rose sharply while the distant March maintained firm trend as the week witnessed switch business and combined speculative buying.
On Monday papers remained closed, the Tuesday's trading report was available. Future today was mixed in mostly switch business as players got out of positions in spot December before the delivery period commences next week. Dealers said a major merchant is believed to be the big player with a long position in December and standing for delivery.
The world record cotton production continued to haunt market. On Wednesday the trading pattern was same. Futures ended mixed on switch activity as players sought to move positions from spot December.
The traders said that market would want to compete the transfer of positions to the back months before taking another look at fundamental factors and then decide on the direction of fibre contracts.
Analysts saw another lingering effect from the squeeze in December caused by a lack of certificated-cotton stocks, which forced investors to pay up and cover positions in the contract.
The futures settled higher on Thursday on combined speculative buying and playing their transfer of position in December to back months ahead of delivery period soon.
Analysts said the market was also buoyed by USDA weekly export sales report being at 265,700 RBS on November 11.
Friday's season saw futures mixed as trade buying supported the back months and investors completed moving positions out of the spot December contract before first notice on Monday.
The spot December was up but active March eased. The cotton market will be closed next Thursday for Thanks giving Day.
LOCAL TRADING: The most of the trading days were inoperative due to Eid holidays. The market reopened on Thursday and sources reported nothing had changed. The TCP had been continuing with the lifting and had contracted so far around seven lakh bales.
The slight change was in TCP switch over to buying also from the ginners. Sources said cotton prices were getting immense support. The spot rate was unchanged at pre-holiday level - Rs 1920. However, on the re-opening market witnessed on rush of spinners, millers, and exporters.
However, specific deals were not received as the first day generally is a day for Hello. Sindh cotton they said were being sold at Rs 1825-1975 and Punjab Rs 1975/2000. The TCP activity was also showing the same sentiment owing to holiday.
FRIDAY'S SESSION: pretty replete with substance due to release of the PCGA, which reported higher than expected seed cotton arrival. The buyers recoiled to watch, from the sideline expecting ginners would relax prices to offset arrivals. Big lot buying was seen from Sindh and Punjab. Spot rate, was steady up to Thursday rose by Rs 25 on Friday to Rs 1945 without upcountry expenses.
SATURDAY'S: At the weekend, exporters and the Trading Corporation of Pakistan (TCP) were in the market to make-up their immediate requirements, cotton analysts said.
In the meantime, mills were not able for fresh buying of cotton in anticipation of further decline in the present levels, they added.
SHAKY INTERIM PERIOD: Whether the US government will be able to stand the influential voters and hum and law who are bound to lose jobs in hundreds and thousands from the textile interests. The WTO rules expected to role the global trade is a matter of days when the US textile makers will surrender to on rush of cheap products from China.
India and even Pakistan, to name a few. How for the authorities would cross over to the WTO areas is evident from sporadic cases brought to dispute body decision US refused to accept. In the last elections presidential candidates had to simply lowed to the textile manufacturers.
Now once at again contestants had soft words who have been calling for safeguards against WTO starting in 2005, aimed at stemming the flood of cheap goods from overseas. It needs to mention here that it took 10 years to finally OK the WTO still not without some lurch.
The two major players in the WTO, EU and US are still to do away with the huge subsidies on agriculture directly hurt the poor nations. It is unlikely that the US will easily give decades old system of import quotas. It is currently limiting clothing and textile imports for protecting its domestic trade. Noted economists are pleading to withstand significant period of shake out and consolidation in the apparel industry with the lifting of quotas.
The industry owners and experts feel the best way would be to alter infrastructure or be eliminated. Despite careful adoption or otherwise, the higher wages and sophisticated technology are bound to throw thousands out of work places and running door to door for a job.
The US labour department estimates the end of quotas could result in the loss of some 450,000 US jobs between 2002-2012. The Pak textile exporters would do good to hold their breath for an interim period to stay in the textile business.
TEXTILE CITIES? It is but natural to look around curiously whether in Pakistan anything like South Indian textile town of Tripura exists lightening belt for the end of global textile quota (just 43 days hence).
In Pakistan it is always so provocative anything novice or naturally result yielding project gets going in the neighbourhood. But soon the dust settles down as if nothing was heard or seen.
No the lamentation is not entirely true as in Pakistan not town but textile cities, on, probably lines of Dubai, were being planned. The same is meandering on the swiftly moving shoulders of thinly invisible air.
The creation of long, long outstanding demand of maximum exchange earning textile sector had invoked hope that January 1, 2005, might have been in view. But it has been receiving kind of treatment the illegitimate kids get in third world countries. Paper reports have been portraying disappointing picture from anything to remain languishing to even being scrapped?
Unfortunately competition which thwarts monopolistic tendency is the last thing, the circles close to textile trade said, tolerated here. Somebody perhaps here has suggested for switch over some other prospective crop or products. China and India stand in the way of competition so better to give the country a walk over. The textile cities are being planned and textile ministry is being announced need to be promoted for greater good.
Tripura has over 1000 textile units vying each other to bring foreign exchange for the country. The government expects textile exports would earn 50 billion dollar by 2010. Sources said the time has come loudest voice could be given due consideration, but the decision should be in the interest of the country.
Local lint and cheap labour should have helped considerably, but textile machinery and chemicals and dyes are all imported at high cost, sources said.
TAIL PIECE: If Egypt gets a duty free access to the US markets for its textile exports it would be a great blow to Pak textile exports. Trade sources question where have Pakistan and Pak exporters have failed and why?