The cotton trading during Ramazan is traditionally slow paced but this year wrong reading of the fortnightly PCGA figures distorted and when buyers resisted prices conceded considerable ground to end at Rs 2325.
WORLD SCENARIO:
A fresh fear of Hurricane damage kept major players directionless as other factors also did not provide any support to futures such as one being export sales.
The cotton futures on the opening day were seen under pressure by trade and speculative sales as March slipped 0.82 to 57.57 cents and with the exception of one contract, the rest of the board down 0.05 to 0.90 cents. The December contract was down 0.93 to 56 cents a pound. The analysts expected short term outlook though is for cotton prices to slip in the weeks ahead as harvest pressure funnels supplies of cotton into trade channels.
On Tuesday the trend was no better and contracts dipped on trade sales and speculative profit taking, from players who recently run the market up to its highest level since early July.
Fundamentally the market is monitoring the on going US cotton harvest and the pace of demand in places like China and worlds top consumers of cotton. Hurricane Wilma was considered a non-factor in the market. Heavy rains however would inflict damage on quality. On Wednesday futures dipped three week low on spec and commercial sales and traders hoped prices should steadily decline on follow through pressure.
Analysts said monster Hurricane Wilma churning towards Florida form the Carribean would not be a big worry for the cotton market because most cotton areas in Florida are in the northern part of the state and away from the southern regions being targeted by the storm. However Fundamentally market must contend with the continuing harvest of another large US cotton crop in the coming weeks.
On Thursday futures ended weaker on modest commercial and speculative sales as market desperately needed news that can infuse next move for a direction. Even the weekly export sales report failed to provide a sustained boost for futures. USDA cotton sales amounted to 135,700 RBs from last week's 168,100 RBs. The Hurricane Wilma has been non-event because it does not seem to posing a threat to cotton areas in southern US. On the week end futures closed higher on combined trade and speculative buying in a modest recovery, with market players saying fibre contracts will look for leads next week. The December contract closed at 54.59 and March at 56.42 cents a pound.
LOCAL TRADING:
Erratic moves were clear in cotton trading confused utterly due to differential in arrival during the two fortnights as a result rising prices could not keep pace and went substantially down as buyers rejected the speculative move.
However, opening day trading saw cotton supplies tight leading to price hike ahead of PCGA arrival report, market operators said. Ginners in the know of things rose spot rate by Rs 25 to Rs 2350. Cotton prices in Sindh ruled between 2350/2450 and in Punjab between Rs 2450/2475. Phutti was selling in Sindh at Rs 1100/1140 and in Punjab at Rs 1100/1175. However buyers stayed cautious awaiting betterment in supplies.
On Tuesday recent arrival perception helped surge in cotton prices. PCGA report reported short supply for second fortnight in a row. Spot rate was up Rs 35 to Rs 2385. However, cotton in Sindh lost marginally to Rs 2335/2400 and in Punjab at Rs 2400.
The PCGA arrival report until October 15, showed down around 107,222 compared to last years 3,617,867 bales. However, knowledgeable circles were firm that shortfall was lower than expected. The various players were trying to keep prices well under control until the actual production size was above board.
On Wednesday another action that surprised Rs 35 down spot rate. Phutti prices also recorded dip. The buyers decided to indulge in modest buying as they found the various reports speculative rather than near any truth. Spot rate was pulled down to Rs 2350. The TCP tender, meant for both local and exporters aimed at prices going berserk.
Trading in cotton proved the fact on Thursday the prices moved in the right direction which showed there was nothing wrong with the production. The spot rate showing the direction to the south was pulled down by Rs 25 to Rs 2325. Phutti prices also weakened while cotton rates in ready ranged Rs 50 down Rs 1025/1075 in Sindh and in Punjab down by Rs 25 to Rs 1075 and Rs 1100.
On Friday trading in cotton remained firm though phutti arrivals continued to be smooth. Spot rate was though unchanged but prices in ready was weaker by Rs 25 to Rs 2150/2350 in Sindh. While in Punjab prices held at Rs 2325/2350. According to fresh market news ginners and growers both were upset on expeditious phutti arrivals.
Following deals were reported on Saturday amid uncertainties about the size of production, 1000 bales from Sanghar at Rs 2200-2225, 200 bales from Bandhi at Rs 2300, same figure from Sarhari at the same rate, 800 bales from Chichawatni at Rs 2350-2375, 200 bales from Yazman at Rs 2375, 400 bales from Shujabad at the same unmber, 1000 bales from Khenawal at Rs 2375-2400, same number from Gojra at Rs 2350-2375, 2000 bales from Jahanian at Rs 2400, same number from Alipur at Rs 2375-2400 and 200 bales from Burewala at Rs 2375.
FROM COTTON TO TEXTILE EXPORTERS:
Uzbekistan needs to be encouraged and heartily congratulated for upgrading itself going soon to be a textile exporter from 100 pc cotton exporter. It has enriched itself from still to mature WTO, by getting rid of exporting entire 1.1 million tonnes of cotton fibre. Uzbekistan held in Tashkent a cotton fair aimed at setting up cotton trading floor.
Thus it wanted to boost direct ties with cotton buyers, by passing the middlemen. The fair hosted 200 firms representing 26 countries but, Probably Pakistan. Those who participated as future investor, expertise contributor and cotton importers were countries in frontline mentioned as Russia, China, South Korea, India and Bangladesh. Making it clear right at the beginning that Pakistan was invited honourably quite some time back.
Pakistan is today qualified in more than one ways to have been ignored. What, however, led to such silence and absence that Pakistan was beyond comprehension. The fact is that Pakistan manufacturers and exporters of textiles and cotton importers had been informed. But Pakistan probably regretfully begged to be spared from pursuing for investment and probably other activities also.
The reason given was probably a host of problems insurmountable, such as insurance of safety and security, curbs on currency convertibility etc Uzbek Dy.
Minister of light industry Kim Tae Bong had persuaded Pakistan assuring of all hurdles to be overcome. He had enumerated cheap cotton 200 dollars per ton income tax facility, availability of working capital was to be arranged through Japanese and South Korean Exim banks. But even very absence in early October 2005 meeting as the report was silent, shows Pakistan had politely turned down the offer.
This was in the face of Pak commercial secretary's suggestion Pak presence will help increase Pak profile in commonwealth of independent states and the fact that Korean, Turkish, American, Egyptian and others had agreed investment in Uzbek textile industry.
EYES ON MID-DECEMBER:
Only miracles can gift poor by way of successful end of 6th ministerial meeting to resolve left over agenda of Doha Round in (Hong Kong). The former EU Trade Commissioner and current WTO chief Pascal Lamy with deep insight into world trade and trend expressed disappointment as he said he was not sure the world would strike a deal that would ease global trade and help reduce poverty in developing world two months hence.
Thus the farmers in developing world would be known as net losers of more rather than less $30 billion annually. The major sponsors of smile providers or the WTO who always have calculator in hand to quickly get at the gain or loss figure and decide which side of the bread lies the butter.
Soon after the system set in early 2005 the US and EU got tense on streaming wears of all size and category into their countries. The pious wish to give the world's poor smiles on faced burst like rain water bubble. Now when poor in Africa, Asia and Latin America waiting for relief of centuries built up wounds, salvos from all directions are landing quoted with the words, wait is likely to be prolonged. The poor are made victims simply because those who have accumulated wealth from every nook and corner of the world, do not want to part a bit of it. The worse is that rich want certain countries showing signs of going rich to bar it by hook and crook. At the three economies are booming and can be expected to master their own sovereignty soon. They are China, India and Brazil for certain.
It the far advanced and developed countries want to eat the cake and have it too can say so. Or they should not blur the sacred words such as truth, justice and fair play. The big lords who plan big projects years before are confused and upset to decided the fate of 6th ministerial meeting just 60 days hence, a clear message of despair and disappointment. Today heavy trade deficit, huge jobless problem and potential developing threat from persisting high oil prices are pestering too much mind to look down upon over bettering their lots.
ADVERTISING PAY:
The EPB adds can serve the purpose of maximising exports of textile items well. In simpler words EPB efforts in making a bid to maximise the textile exports should be taken in right earnest. The two add say that an American Company is coming on buying mission while the other says interested Pak textile exBuyer resistance forces cotton prices to concede groundporters could get reg
istered to explore Japanese potential markets for exports.
The American Company will be here any moment and Pak exporters have been advised to counteract with visitors in Karachi and Lahore at the given time. It is believed that efforts will lead to Pakistanis getting good order for exports in America, Europe and Japan.
In this connection we can recall at least similar bids to promote exports of textile products. One such efforts were seen at Expo centre Karachi which ensured good knowledge of Pak products about their quality and taste. The foreign visitors had expressed great satisfaction which meant streaming of orders. Similarly, a textile export fair at Moscow organised probably by two Pakistani companies was great success.
The Deputy Director of Textile Fairs in Moscow Larisa Demilievna the show harbinger of best of relations between the two countries. The hope Moscow was likely to emerge as huge textile market for the world. coming back to this write up, the advertisements.
The first one is regarding a buying mission comprised of textile and apparel buyers from two huge markets - Europe and the US. The prospective sellers could make time to see with ASAP show inc on October 22 and at Lahore on October 24. From buyers at doorsteps to sellers in Japan try being planned by the EPB to equally potential markets in Tokyo and Osaka. Both places need best salesmanship from prospective Pak exporters.
A ground work well in advance will lead to good size business. Salesmanship plus Pak products are not unknown in fashionable markets of the world. It is hoped the way WTO system has started initially, such contacts will yield definite buyers and for quite some time. But experts commented patience and hard work flanked with quality and competitive prices prove to be lasting.
TAIL PIECE: Quite unusually long stay in China of a minister belonging to world power US treasury secy John Snow was expected to have been thrashing out not merely yuan but exports of textile and made ups. But the visit only exposed nothing beyond mandate to monitor China move on yuan. Snow beamed from China to his countrymen message of hope that China was on track on flexible path though preparatory steps should take longer than US would prefer.
By barring from free trade the two world economies US and EU have threatened of consequence. China unconvinced of the logic behind threat accepted to embrace losses and would only submit at a time it will consider proper. Such tug of war created by world major economies meant that poor developing countries have no alternative to keeping their voice low and head bowed. Amid hope and otherwise, situation Snow warned China had to show progress to hold off US protection sentiment.
The news that efforts are afoot to avail for Pak exporters GSP plus in European Union has brought fruition would be real big and happy news. However, next week might we are able to give exporters the news they want to hear.