Rallies in cotton futures helped local cotton to maintain firm trend despite opening of TCP tender and importers men round to lift with offer of 48.7 cents a pound, relevant sources said during the week ended on April 30, 2005. The spot rate remained unaffected despite TCP unloaded bulk of its stocks. It stayed at Rs 2225.
WORLD SCENARIO: All round buying pushed cotton futures sharply higher at 10-month high offset also by speculative sales. The futures May opened the week up 2.10 to 52.25 and July up 2.89 to 57.10 cents a pound. Sharp rally was marked on the opening day as market saw all round buying with high hope that fallow through purchases are imminent.
Analyst hoped the news that leading merchant Duravant Enterprises was the stopper for cotton deliveries and that the firm decertified a large chunk of cotton sparked market. On Tuesday futures end 10-month high owing to speculative sort covering erased an early downturn with operators uncertain of the market could sustain at these levels.
Analysts commented the twin moves meant Duravant likely led the high sales on its books hence the market rally. Meanwhile, USDA supply/demand report China's cotton output during 2004/05 was estimated at 29 million bales and imports were pegged at 8 million bales.
The third session settled lower on late speculative sales as market awaited sales report to provide direction. US cotton shipments of previously booked orders were seen ranging from 350000 to 450,000 RBs against last weeks 432,200 RBs. Another bullish factor was news that China's cotton output in 2005/06 marketing year (August/July) may only reach 25 million (480 lb) bales and imports of over 15 million bales.
On Thursday's session futures turned firmer as operators said news on suspected Chinese buying might filter out to the market over the next few weeks. The market dropped to its lower end at the session's start owing to disappointment over USDA weekly sales report. It said cotton sales stood much below expectations at 227,000 RBs.
Analysts said the market had been banking on confirmation that top Merchant Duravant had booked a large order of cotton sales to China. The news that administration will probe into surge in Chinese textile imports did not import the trading. On Friday buying by small speculators pushed futures higher. Meanwhile, USDA weekly export sales showed US sales at 227,000 RBs, sharply below trade belief. Futures May shed on 40 to 58 and July up 8.03 to 57.05 cents a pound. However, rallies have cautioned trade as they have no background.
LOCAL TRADING: The opening of the bids by the TCP and sales to importers and exporters was the feature of trading on the cotton market. As a whole depressed conditions prevailed. Spinners were if at all interested in buying local cotton it was selected quality cotton. The spot rate opened at Rs 2225 without upcountry expenses. The rates in ready prevailed at Rs 2050/2250 per maund.
The agents of the importers were on the round to lift quality lots from the TCP. However, on the opening day firm conditions prevailed. Spinners indulged in buying sparingly when urgently needed. They were basically concentrating on quality lots. The moving news was that TCP had accepted bids from local textile people. A couple of deals were struck.
On Tuesday sluggish going was marked as mostly buyers remained on the sidelines. Spot rate was unchanged and asking prices also remained almost same Rs 2050/-2200. TCP sold 22,500 bales to local mills and 20000 bales to the exporters. In ready a couple of deals were struck. On Wednesday buying remained dull as spinners stayed away hoping ginners will reduce prices but that was not to happen.
Spot rate, rate and ready remained static at previous levels. Sudden surge of mills and exporters demand for cotton saw trading activity considerably cheerful. The lifting however, was confined to only quality lots around the ruling ready rates. Spot rate was unchanged at Rs 2225. Some 1200 bales changed hands. But buying could have moved further if ginners had not restrained setting. Friday's session saw modest trading at ruling prices - Rs 2050/2200, spot rate was put at Rs 2225. Meanwhile, TCP has allotted 60,000 bales to be sold to exporters and textile mills Saturday's.
PROBE LAUNCH SOON: Tempo has been gaining momentum in sort of conflict over how much China should export to EU (US) countries following quota phase out after January 1, 2005. As was expected Chinese apparel and garment exporters could not keep hold on export to EU (US), which inked manufacturers/importers in both countries.
Those countries have very close relations but steps against China in lastly manner is not reasonable. Realising some excesses had been marked, China warned following noises about curbs on imports to protest local interests. The Chinese assurance has offset much of the anger among authorities in the two countries. Initially the conflict appeared quite serious but seemingly all China, EU and US on their parts restraining to create bad taste while defending the interests if problem hit the local producers.
The European commissions is looking intently into the facts that Chinese import into EU had increased by 534 percent in three months against a strict guidelines increase of maximum 100 percent. Authorities have not been satisfied over Chinese reply to make amend and urged to explore whether they cannot do more. The EU trade commissioner was sure that the probe yet to be caused will end in 60 days, subject to prove, a ceiling will be imposed strictly afterwards.
The ceiling, if proved import in T-shirts, men's trouser, pullovers, blouses, stocking socks womens' overcoat and flax yarn. China had agreed in 2001 that victims members could cap imports at 7.5 percent above the level shipments of the previous year until 2008, provided imports has created market disruptions.
There are factors, however, several in numbers that have restrained authority in both US, EU to back up their mills. Primarily, sanctity of WTO system in view, besides promise to mend wrong, and China making yuan flexible, and export cut will lead to US cotton exports. The conflicting interests and ideas among 25-nation EU remain divided on the need for curbs such as Sweden, Denmark, Germany and Netherlands who complain such action would smack protectionism.
AVAIL OPPORTUNITY:
The real producers, the skilled or otherwise textile workers in this country are hired. How much is agreed upon to pay the wages needs beggar description. Besides, management is quite aware that while workers should show best of results, must not develop art and skill in the process of working.
Today since the WTO system or quota free global trading has started, while China and India are on top exporters, Pak lacks many qualities that produces cheap plus quality products.
The short sightedness for these disqualification lie with the owners who invest 15 percent or so money and rest assure the rest will be done by vulnerable governments, international banks and local banks and financial institutions. Any government move to enrich exchequer is seen telling on the units strength and will lead to way laying workers or lead to mills go sick.
The knowledgeable circles expressing above went on to say that around a dozen of PMs and Presidents, who sited the high seat of governments from Islamabad with wishes to serve. This God-gifted country but sort of afloat country go surrounded by sycophants, who manipulate them to how to build palacial buildings, property and name instead of a strong Pakistan. During all these decades since independence high textile magnates from world over who attended seminars and workshops urged textile exporters to get out of notion of exporting cotton, producing cotton yarn and gray cloth and switch on to the value-addition and garments etc.
But change was never taken as a challenge and hence the proved textile sector maximum foreign exchange but total being around $67 billion or so. This is well-know even developed countries subsidise sectors in need such as US and EU but the gainers show honestly in paying back in the shape of taxes due. New world trade order has been effective which was claimed to offer opportunities particularly to textile exporters. The world has seen China emerging as the top scorer on the trading horizon. But Pakistan has a lot of problems taking back its edge to come from the government kitty. Yes, all exporters in every country gets help from governments, but not that they wait aid to come from abroad to strengthen Pakistan.
It is good news SBP Governor and PM has sanctioned No 18,000 for own use imports of spares without opening LC or providing bank guarantee from suppliers. Five percent besides other facilities either have been arrived or in the offing but the fact that garment sector rebate to cause Rs 8 bn revenue loss leaves bad taste in month.
TWO MLN VS 90 MILLIONS: Not too far back, some newly entered young businessmen enthusiasts took upon themselves given fat salaries and luxurious living abroad to enhance trade. But that could not sustain. Today you are shocked to learn that Pakistan exports to a country just two million dollars, while one of our smaller neighbour earns $90 million. The fight the young enthusiasts had started, subsidised since then.
Current report will whip up someone to raise eye brows but end in a shock and despondency. The background of the above lament is that "made in Pakistan" exhibition began in Tajikistan the other day, which revealed the sad fact.
The LCCI had arranged a three-day "Made in Pakistan" exhibition which was visited by interested quarters from Uzbekistan, Kyrgyzstan and host Tajikistan, where stalls displaying products of as many as 38 Pak companies had been set up. Even though road links and improved communicational links have yet to spring up, but the vast gap of two million and 90 million speaks of volumes. This shows our embassy manned by assumingly youngmen are faced with road blocks or have no urge seemingly to explore local potential.
The result one could see in growing two million dollars, despite both countries have resources to exchange. Pakistan has advantage in two major fields such as textile and aluminium. But the idea never dawned before the LCCI bid to excavate and find Tajikistan's potential. Pak ambassador to Tajikistan rightly reminded that both countries had centuries old relations, therefore, need for enhancing bilateral trade relation and this might be a milestone to further develop two-way ties.
It is not only the Soviet Union's states for decades remained dumped under the iron curtain, but take any country Pak diplomats are stationed without budge circles said. The Tajikistan disparity in trade benefit could open up eyes of our diplomats to weigh the difference in two million and 90 million and efforts are made to bridge the gap, sources demanded.
TAIL PIEICE: Cases pending since 1996 against 350 textile and leather sector exporter have been withdrawn to create "goodwill". The CBR has waived recovery of Rs 500 million. The exporters waiver allowed belong to mostly textile and leather sectors.