Long wait for the PCGA nearly last arrival statement and the TCP tender float result kept trading dull and drab. The spot rate which is exposure expenses, during the week ended on April 22, 2005, relevant sources said.
WORLD SCENARIO: Cotton futures maintained generally firm trend owing to merchants and fund buying, intervened by speculative sales offsetting the gains. May contract opened at 52.06 and July at 53.14.
The first session was firmer as merchant and fund buying pushed futures considerably higher with expectations of buying support to continue. Analysts were of the opinion that once deliveries in May contract start next week and are out of the way, trade will begin focusing on the supply/demand for 2005-06. On Tuesday futures boosted to 10-months high, and fund and commercial buying continued.
Dealers said May, July contract indicated in major US cotton merchant will take delivery of the fibre. Beside it, another main feature in cotton market was extensive switch trade as investors transferred positions from May and into the month.
However, US supply/demand report bold key for present. The next day futures turned mixed as speculative sales offset the gain on the back of commercial and fund buying. Operators felt more volatility likely before the market goes into delivery in the coming week. Brokers expressed on day's trading that cotton marched higher in early trade on heavy buying by, top US cotton merchant but speculative sales offset the gains.
On Thursday market finished largely easier as players engaged in last minute liquidation of positions in spot May with the delivery period coming up early next week. Analysts said USDA weekly export sales report turned out to be pretty encouraging. It said cotton sales announced to 27400 Running bales. US cotton shipments of previously booked orders surged to marketing year high of 432,200 RBs.
Traders hoped figures may need to maintain for cotton exports to reach USDA projection of 13.2 million bales (2005-06). Local holiday kept back information from world over, hence week-end details are not being given.
LOCAL COTTON: The cotton consumers pressure on the sellers persisted, while the ginners resisted and in the process trading maintained insipid look. Both the spinners and ginners looked for the production report and the result of tender floated by the TCP for both the importers and local consumers.
The spot rate opened at Rs 2225 and rates in ready prevailed were Rs 2050 and Rs 2200.
The opening day was sort of price war between the sellers and buyers and both sticking to their own stance. However, PCGA statement was about to be released. Both major players awaiting news that could offer them a trading direction. The ginners were, however, disturbed due to falling quality of the lint they had and attitude of the spinners.
The second session was no better as far as trading was concerned. But the PCGA figures showing enhanced than the previous one stood in favour of the spinners. The TCP tender float was announced and the result was expected shortly. The third day's business was surprisingly low despite PCGA release but it appears TCP was weighing on the buyers.
The spot rate and rate in ready stayed unchanged. The market was heavily impacted owing to Eid Milad-un-Nabi (SAW) holiday. Both buyers and sellers stayed on the sidelines. Spot rate was unchanged at RS 2225 and ready rate continued at Rs 2050/2200.
However, the low deals were also because buyers waited for TCP tender to open next day -April 23, to open up their pockets to acquire the best available lots. Indeed, TCP was also in a winning position as they will get good sales proceeds. Only next 12 hours will show whether, insipid trading gets new life on Saturday as Friday's session remained close on account of Eid Milad-un-Nabi (SAW) and Saturday's market situation is not included in the present review.
BANGLADESH TEX TEAM: A Bangladesh textile team was in Pakistan the other day for boosting two-way trade and economic ties particularly in textile sector. The much experienced counterparts in textile folds held out hand of assistance to the team members. Pakistani textile millers assured visiting team to feed their textile mills requirements up to satisfaction such as raw cotton and cotton yarn.
In return what most earnestly transpired from team members and High Commissioner in Pakistan that eager Pak textile millers and yarn suppliers will get all co-operation. The business visa will not be stretched too long than necessary. Pakistani counter parts were lured to visit BD and explore possibilities of joint ventures in yarn and textile products. BD members stressed that previously outsiders were not allowed to invest in BD and the opportunity should not be lost sight of.
The Pak suppliers were happy to inform counterparts that under 2010 vision Pakistan was in far better position to supply world standard yarn and other raw materials. Hence BD counterparts would find Pak products for garments making acceptable in world markets in quality and price. BD team expressed that Pakistanis do not need to do the salesmanship as they know the worth.
The Pak suppliers were receptive to the plans and hinted that need should be explored for making together a system which would be sort of benchmark arrangements between. APTMA and BDTMA on pricing and quality. The BD team was thus hopeful that BD will welcome joint ventures.
They specially pointed out that the Pak products will have access in EU and US markets. The High Commissioner appreciated the optimism between the two teams. He hoped already existing political relations will help boost trade relations required for mutual benefit in the wake of WTO provision.
COTTON SOWING: The sowing of cotton in Punjab, says a news paper report, will start from May 1 or around. Those approached could not confirm whether it was usual in Punjab. In Sindh, some not as competent cotton men were only this much aware that sowings had started in Sindh quite earlier. What comes to most of the knowledgeable cotton circles is that around July, Sindh could venture in to sow cotton.
The Punjab followed after three months. The absolutely upset developments, circles said are understandable. The cotton value is what actually determines how and when to sow. The growers then respond, according to the signal they receive. The growers, hard up as ever in this country where ,circles pointed out ,distribution of wealth is uneven, think before sowing.
The preceding season, if had good return at hand, and could serve them to meet two square meals, marriages of wards, and other rituals, more acres are brought under cultivation and more money is spent on standing crop. Today, growers have had enough return from cotton. The prospect for the crop to ensure even better return appears certain.
The first time huge investment in balancing and modernisation and attractive exports have induced the growers to probably go earlier them to wait for the sowing. A good start has already come their way. Govt. free of IMF and World Bank curbs on subsidy has added another Rs 50 to the procurement price to Rs 975 from Rs 925 in the preceding season.
In daily sales also the cotton consumers could not effectively plan to pressurise the ginners to yield to their low offer. The future has in store better prospects as the growers and ginners in the backdrop of govt support have learnt to protect their interest, sources said.
CHINA UNSCATHED: What possible reason or reasons have not been to punish China for allegedly causing disruption in US, and EU are for from clear. That Chinese textile products poured into US and EU caused disruption in local markets caused heart burning. But reasons known to them China has remained unscathed so far.
However the exports of apparel and garments to US and EU have shown vast differences such as in EU was it just 50 percent and in US around 25 percent. China has control over what it does. Hence adversaries are often left with many options, what and how to react when China is in question. China had taken immediate notice of the clamour in US and EU soon after WTO set in January 2005. It did not waste a minute and told importers that wait on and see how China keeps its promise made on the eve of entry into the WTO 2001.
Today whether action has been initiated in the two countries or not, silence is meaningful. More understandable position is in respect of EU, where only 50 percent rise has been marked and no action plan has been announced. For China cut in its apparel and garments exports will not be difficult to bring in size with required quantity under the accord.
China understands what difference it will make if importers take action, which disturbs working pattern for weeks and years. So China has promised to check itself excesses if committed and correction might be in the offing. The major action as big as the country will result in as much loss. Besides resolving the problem once it has set in system will take long time to correct the same.
Three months have come to pass it is expected angry partners have realised that sanctity of the system just begun should at best be preserved for smoother going. The WTO system has already problem which is unlikely to be solved anytime soon, as problems of subsidy and distantly linked aids.
Then what is it Greenspan's caution that budget deficit should be taken rather carefully or that country has taken for granted China is considering yuan's flexibility to meet the American time.
TAIL PIECE: The Agatex 2005 for garment machinery will be inaugurated on April 25, 2005. The same venue had witnessed similar exhibition on 13/16 April. Not to forget that Turkish built textile machinery was displayed at a local hotel. Pakistan made textile machinery had ever been displayed at such international events, one cannot be sure.