Prices were untouched by the reverse trend in NY owing to major players taking time for the PCGA arrival report expected to be on the higher side. The TCP's likely signing of 2.5 million bales deal with China kept tempo firm. The official spot rate collected Rs 50 during the week to be quoted at Rs 2,100.
WORLD SCENARIO: Prices bulged overnight in New York trading as sowing was reported down in the US, though fundamentally market looked meek. The March future opened at 43.35 on May, at 44.45 cents a pound and ended March at 43.20 and May at 44.53 cents a pound.
The first day's trading ended firmer on the NYCE in reaction to late Friday report that farmers would plant fewer acres of cotton in 2005 than last year, but trade was restrained by fund selling and spread activity. Cotton has been burdened this year with increased supplies, but traders observed this has been offset by robust consumption in China and elsewhere. On Tuesday futures followed the trend with marginal gains on modest speculative buying and the market was drifting along due to a dearth of news to give it a direction on next move. The trading on Wednesday pushed prices slightly higher on speculative buying in activity, which featured players transferring their positions out of spot March before the delivery period this month, traders observed.
They added further that the market has been able to digest the record US cotton harvest and similarly plentiful crops in other places such as India, China. Robust consumer demand had partly offset that bearish fundamental. On Thursday, futures turned weak as speculative sales and switch trade with bullishly robust US cotton sales having a negligible impact in the market. The USDA weekly export sales report was shrugged off by the market. US cotton sales surged to 406,800 RBs, sharply up on trade belief. Shipments of previously booked orders reached 288,500 RBs. Last session ended mixed as investors continued to transfer position out of the front contract and the trade was waiting for release of a government crop report shortly. The report expected next week may set direction for a fresh trade going.
LOCAL TRADING: Cotton prices opened lower but then one factor or the other kept prices firm. The international lint prices rising trend had not touched late in the week. The local trading depicted subdued going because of spinners and textile millers hoping the PCGA fortnightly report would be on the higher side and hence prices will be soft favourable for buying. Spot rate opened down as it was quoted at Rs 2,050. The seed cotton rates were same as on the weekend. Ginners also countered distancing of consumers by making no hasty sales.
On the second day prices look firm as Pakistan appeared to sell around 2.5 million bales to Chinese visiting team, allowed by the higher authorities. Exporters nearly have exported 5,500,000 bales and hope to tire after despatching a total of one million bales.
The phutti in Sindh was selling at Rs 900-1,050 and in Punjab Rs 900 and 1,100 while lint in Sindh was changing hand at Rs 1,900 and Rs 2,200 while in Punjab it was being sold slightly higher at Rs 1,950 and Rs 2,200. On Wednesday steady market was seen where spinners had started strictly concentrating on quality lint. Spot was stowing higher rate at Rs 2,075. In ready prices were same as on the previous day. The report that TCP was likely to sign sale deal with the Chinese visiting team had impacted price trend.
The market depicted firmer trend on Thursday as exporters entry supplemented absence of the TCP temporarily. That TCP is likely to sign 2.5 million export deals with China was also a factor that led to rise in prices. Spot rate was seen higher at Rs 2,100 and sales in ready reached nearly 12,000 bales. The players said they were expecting change in price trend on news about rains in cotton growing areas.
Friday's trading appeared brisk as spinners and exporters both were in the market to lift their needs worth. They were preferring for the quality lots. Cotton prices were also firm at Rs 1,900 and 2,200. Seed cotton was quoted at Rs 800/1,025. Spot rate was also firm and unchanged at Rs 2,100 must be feeling relaxed after exporters entry as TCP is relaxing after hectic deals signing and receiving deliveries. Saturday was Kashmir Day.
VULNERABLE GROWERS: The cotton growers are being made vulnerable yet by untiring calls that textile millers would need around 14 million bales or so. Actually it depends on situation with zero compassion for growers that buyers let cotton rot in the ginneries, observed knowledgeable circles commenting on past ugly experience. The growers have not moved an inch since Pakistan became independent in 1947, they reminded.
The TCP, subject to govt approval, considering to sell cotton to local textile millers. Indeed, this has a precedent. A deeper study shows a third party is needed for buying cotton when cotton prices become victim of manipulations.
Bothered about importing more cotton on increased consumption, textile millers want growers to grow 14 million bales, the present need, and even more in times to come. Growers would do so, but will they be victim of indifference when they actually take textile millers on value. They have always been so. But when the local mills requirement is placed much above the actual ones then growers have no alternative to burn cotton in front of certain Press Club to express their indignation. The WTO has offered opportunity to the textile millers to earn to their heart's content but it should not be at the cost of the growers, sources said.
Growers have always danced to the tune of consumers obviously for the sake of gains, but managed purchases have such a desire wanting. They cherished opportunity offered by the new global trade system should be for constituents progress and prosperity. They hoped there will be no more need for calling TCP at the cost of public money to lose.
KNOW TEXTILE INDUSTRY: More than textile millers and exporters, foreigners do know the potential and worth of textile industry, who are invited to deliver knowledge in a workshop or seminar. More than textile manufacturers and exporters foreigners know the truth about the foreign exchange earning.
Unfortunately, the knowledgeable circles have expressed on quite often boastful statements that textile industry earns highest exchange for the country, negatively. Foreigners have also often pleaded the elites to switch over to value-added goods to take foreign exchange earnings to above $8 billion. They had joined in chorus with local manufacturers that yarn and grey cloth generally exported from Pakistan earns 10 times less than what garments, towel etc with value added to them earn.
A recent letter in newspapers has made a bid to open eyes of relevant people in textile industry and the authorities, with a ting of responsibility on the latter.
Industry people here boast about second hand machinery imported from countries where textile mills fail to function. About recent huge investment nothing except this has ever made known. May be new and worthy machines have been installed.
But country had looked for decades some body has boasted about setting up textile machinery plant. This is one of some other reason why Pakistan products are not cost effective. That is why sources think exporters look up to govt to extend such facility as to help production of cost effective products to be able to compete in the world markets, more so now when market is open to all. The wealthy millers have been always reminded of industry needs such as dyes and chemicals if they are local and goods were manufactured by local plants. But that plant/plants remain distant dream. Then how could Pak exporters/manufacturers be expected to be competitive? by govt incentives and facilities. These are a need in China and India also. But, in China and India industrialists and exporters know that without exportable goods produced with local raw materials and locally produced chemicals and dyes making good competitive is unthinkable. Circles express surprise whether govt or the industrialist or both are responsible for never thinking to make the country independent in all spheres and respects. There is FDI talked frequently. Unless country is made as self-sufficient as possible, merely talking won't do. In this both govt and those who are wealthy with lots of experience in textile export and business can do wonders.
DETERMINED STATEMENT: The determination shown by the textile minister sounds quite familiar to statements of succeeding ministers, yet one can safely say good days for textile industry may be in sight. He was vocal on many counts such as deliberate bid was made in the past to ignore the textile industry. The statement is not directly attributed but the official who revealed can be taken on face value. Exports have not just been telling so, but had advised switch over in thinking but was never a trial. The textile minister lamented that he himself tried to find some action through the minutes of various meetings but there was none. Minutes would have spoken about the action following the meeting. He seems to have caught the nerve of problem such as dealing with anti-dumping complaints. If govt and parties would see how complicated was the issue matching negotiators were found. But if the negotiator was Pakistan he was not aware of the rules, laws, practices and tradition. Similarly, a Belgian felt uneasy to effectively fight the case. The decision to appoint permanent negotiators familiar with the international laws. (Incidentally, problems crop up frequently), is correct, belatedly though. In regard to enhancing working hours on grounds that Americans also work for eight and more hours. Since wages are also in view it would be not out of context to suggest to fix wages close to US workers.
About training of workers efforts may be made to train workers on service so that replacement by newly trained workers displace the workers already working. However, as he was critic of previous inaction that failed to bring about improvement in the textile sector, if textile minister honestly adheres to his own commitment to implement then minutes of the meeting it will mean setting a unique trend aimed at ensuring overall progress and abundance.
TAIL PIECE: Made in Pakistan Exhibitions in Tajikistan in April next is an occasion to explore possibilities available in that country, more so in textile, surgical and sports goods.
Another story invites particularly garment makers to set up industries in Jordan in qualified industrial zone (QIZs) and duty free access to US markets. Income and social services tax has been exempted for 10-year period.