Surprisingly cotton market has not been as active as it should on govt's offer of huge Rs 25 billion package and various other facilities. The million appear to have been slow to see the end of last season stock with TCP. The spot rate looked tired and unchanged at Rs 2500.
WORLD SCENARIO: Trading on the NYCE on Monday gained pace following some buying leading to 0.58 cent rise in October contract to 50.95 and December was up 0.60 to 52.76 cents a pound. The gain was in the ultimate analysis gain across the border.
On Tuesday follow up in buying up specs and fund continued to show 1.45 cents rise in October to 52.40 and December was up 1.41 cents to 54.17. The deliveries in previous contract have almost come to end and players are looking on spot October for enhanced trade. They are waiting for good news in Texas for rain and weekly export sales report by USDA.
On Wednesday buying continued as players also waited for Chinese demand which, when received, will push sales to a news season high. The October contract closed 0.50 cents to 52.90 cents and December up 0.53 cents to 54.47 cents a pound. The players had waited for weeks to this day. But Texas remained worry point for major traders. The production has by and large remained subdued but as the new season starts the cotton demand and buying order will rise. The weather forecaster service sees temperature to average to much above normal and rainfall to be near normal to below normal.
On Thursday the futures failed to maintain four week-higher rising spree as export sale expected to depressing trend. The operator looked dry spell in Texas and other South cotton belts to tell on trading and prop up futures. However, the trend could not persist as October was down 0.65 to 52.25 and December down 0.51 to 54.19 cents a pound. The trend will depend much on export sales which appear to go down when they are released.
On Friday the depressing spell on Thursday changed to sharp upturn in trading and futures value. The players who have been watching uncertain condition and speculator active on the market have helped the future to rise. Besides, the dry spell for long in US areas producing large cotton has according to traders will keep futures firmer, Meanwhile the USDA report on cotton export sales showed total sales at 142,200 RBs up from previous week similarly shipments reached 442,000 RBs above trade expectation. However the futures October notched up 1.35 to 53.60 and December who is said to have been lacking steadiness was also up 1.27 cents.
LOCAL TRADINGS: Besides the wait for the turn in higher prices, cotton buyers restrained themselves to see how trade policy touches the cotton understandably to enhance exports to Rs 18 billion plus during 2006-07. The official spot rate did not budge for obvious reason at Rs 2550. The trade policy still understudy, cotton consumers waited TCP tender on July 20, 2006. The cotton buying may improve after the big Rs 25 billion package besides other export boosting steps, such as 25 pc freight subsidy.
A deal on Monday was struck for 900 bales sold at Rs 2500 for deliveries next month. On Tuesday ginners decided to cut spot rate by Rs 25 to Rs 2525. The needy millers availed the downing of the prices with lifting a few bales, having read Trade policy will the buyers and sellers both exchanged views how to take advantage of liberal policy.
General atmosphere of appreciation was marked. The ginners hopeful spinners and millers would return to market seeking quality cotton were looking at reserves they had maintained. Both buyers and sellers are opting for caution as trade policy was being considered as ambitious.
On Wednesday trading on the market was modest as around over 1000 bales were picked up by consumers which was worrisome for the ginners as the huge package being thanked for past few days should have enhanced buying. However TCP stock release may have held buyers to wait until July 20, 2006. The spot rate was not changed as buying pace remained low.
On Thursday trading seems to gain pace for the rest of the days, spot was unchanged at Rs 2525. On Thursday a couple of deal were seen having struck around Rs 2400. The trend persisted gloomy leading to pull the spot rate further down by Rs 25 to Rs 2500. The trend was apparently due to TCP sales which was not given on the day of expected release. However, the cotton demand is unlikely to go down as the attractive package given to value added sector will make products encouragingly competitive. At least the gainers have been telling govt through as big thanks.
On Friday a solitary deal finalised on the sluggish market as prices continued firmness despite TCP presence and arrival apparently presenting fine outlook. Spot rate stayed put. The TCP meanwhile received offers for the 32,000 bales against total of 36,000 leads. The lowest rate offered was Rs 2325 while the highest offered by nlll was Rs 2423, much below spot rate. The ginners have been responsible for slow purchases as they are refusing to accepts the reality and keeping prices firm.
On Saturday market players remained cautious only needy mills buying tomeet their immediate requirements, Spot rate was left undisturbed.
GOVERNMENT PROFUSELY THANKED: The govt has been profusely thanked for their request being acceded for Rs 25 billion textile package. In fact the request was for Rs50 billion, which was halved for it is an old way to get the right amount after reducing and adjusting.
The PM was quiet on the subject but president intervened and ECC presided over by the PM granted Rs 25 billion textile package on tacit assurance that it will beat the regional aggressive competitors in the world markets like India and China. What ever delay occurred in instance release of Rs 50 billion package was not as promising past experiences. Besides country and economy has not been so bulgy to yes to every demand, expressed the knowledgeable circles who were watching the spectacle by virtue of being in know of cotton and textile problems and necessity. Earlier a day or two the SBP had begun making textile sector exporter's job easier by reducing export refinance currently at 9 pc to reduce it to 1.5 pc , many more facilities were expected to flow in.
Then came the half of the demanded textile package, as expected followed that 25 pc export subsidy export of new products and also on finding virgin new markets wold over. The fact should be taken seriously that not the textile exporters but the country just ignore their needs. Sources however reminded that even after such big package exporters have not been advised to look around countries which have been earning five to ten times more without scruff of phutti (Seed cotton) but on sheer hard work and advice of experts on the subject.
The South Korean take Dr Mahblel Haq's name with respect for showing them the way to rich good harvest from being honest, dedicated with sense of contributing. Those who spend such big big amount should have reliable calculators to be sure how much you were provided by the not very and ever strong govt and how much you returned
APPAREL EXPO DISTRESSED: The trade policy underwent heavy exercise and made process easy changes even in time schedule for allowing commerce minister to attend international conference. The president also had to intervene on lapses in certain ministries. He hoped better performance on export front in future. The hash, hash on export target prompted him to fix 19.5 billion dollars.
The ministry make it convenient to tell people that original was drastically changed to give the same a realistic touch and to bring in live with instruction from president. According to earlier report the ministry had changed sectoral export target , though ministry disapproved, the official sources still had doubt about the target as proposed by the president despite offers of Rs 25 billion package, 25 pc export subsidy for export of new product or for exploring new markets to supply products.
Any way the outgoing year was considered the most outstanding owing to better performance on export frost. The expo centre at Islamabad and Queta and carpet centres at Karachi and Lahore was welcome. However experts wishd a carpet centre at Quetta was necessary for help earn foreign exchange. He also hoped proportional activity was absent in Balochistan and thought seminar, workshops would help carpet, marble and granite made-ups to make place for export purposes.
Engineering goods could not get the importance and speakers in a PTV programme particularly mention various product at Gujarat should have brought on surface which could attract importers world over. However, what some people in textile sector have been celebrating, others, value added apparel exporters have been lamenting for keeping the new textile package as the same will further increase the cost of doing business. They have also pointed out that fabrics (Knit & Woven) has been made cheaper. The prime minister has been requested to intervene before its too late. The days to come will speak why apparel exporters in their words have not been graced with facilities. These value added exporters had been clamoring for going out of business and wanted possible govt help.
DOHA RESCUE MISSION: A report from St. Petersburg (Russia) where leaders of world's most powerful nation join counterparts from five key emerging market countries to mount like numerous bids to salvage a global trade liberalisation campaign. In fact presidents and prime ministers will try to smoothen up the way toward a successful conclusion of Doha Round. Or may be they will rescue their trade ministers who ended up nowhere ever since the process got underway in the Qatari capital 2001.
Almost all the leaders, who are in this great holy city, have opened up their mouth to call for grounds to give global trade an opportunity to reflect centuries old desire of men to reduce barriers to world commerce in a way that would enable the developing world to taste the fruits of free trade. But their cherished desire and like call to their counterparts to somehow salvage the global trade accused the others to have acted against. The top leaders among the 149 countries have, while offering some ground mentioned how best to get the maximum from the poorer countries.
Brazil and India who speak on behalf of the developing world that they will allow market access to rich countries only when they will be sure their offer meet their claim proclaimed at short gaps they want developing countries to taste the fruits of free trade. For the last five years and more such wish has remained elusive.
The developing countries on the other hand cherished. The US and EU offered still deeper cuts in farm subsidies and tariffs before they start giving ground on opening their manufacturing markets. Indian Foreign Secy Saran just before beginning of the G-8 meeting said India had a great stake in talks success but the developed countries were not showing a spirit of flexibility on issues like agriculture. Thus India (or developing countries) also want to keep 20pc of farm products as "special products" outside any agreed tariff cuts to protect small farmers. The differences that have eluded Doha Round seems to have persisted.
MINI-PACTS DWARF WTO: Two big shots, differences will come to such a passe as to be little the mighty WTO reaching the nook and corner of the globe that may end up with a running commentary of insults. The WTO Doha round was launched in 2001 in an attempt to tackle poverty and boost global economy. But it is now two years behind schedule and risks a delay of several more without a breakthrough in the next few weeks. The WTO an ideal organisation has made to live upto that by big ones who should have nurtured the organisation to this noble end.
The share they had to contribute can in between and the hitch has continued because no one wants to live up to the ideal, fearing the respect and comfort they enjoyed for centuries and enjoy today will probably be on the side of the what with a degree hate they call the developing countries or to be precise the "Third World."
The world powers, whose vote decide the fate of the weaker nations, are apprehensive of the upside down situation that is bound to seal the fate of all powerful. Naturally therefore, they not only had to counter one another on one issue or the other, or more weighing on the side of other came down ultimately to a running commentary of insults, confident that what accord will take away from them, discords won't. And the world won't ever know what the powers were at. And not to forget they have without giving time and thinking pace opened up so called regional pacts to their left and right, above and below. The more those pacts took root the more the value WTO had got eroded with the passage of time and increase in pacts.
The magicians are so confident of befooling people that he shows two fingers to anyone and asks how many are they, answer every times comes one with huge laughter from onlookers who see two. The most powerful are also like magicians who can manipulate situation in their favour no matter how much that is painful to the teeming millions.
Where the WTO is going nobody can say with certainly. Not even the US and EU who have gone to the extent of making a running commentary of insults. The poor world looked to the changing situation with hope the rich countries really mean to tackle poverty and boost the global economy but struggling negotiation are helpless enough to break the stone wall of protectionism whoever might have erected.
TAIL PIECE: The PR printed in newspapers on July 20, 2006, spoke primarily about the Zubair Motiwala commission and textile associations, all lauding the efforts of the economic managers of the country for the liberal packages which however was eagerly sought. However, a meeting held at Aptma office the other day took note of the authorities who always leave some scope for the needs, to "call louder," commented knowledgeable circles.
In this case, they said, members of different textile associations noted that govt overlooked the spinning and knitting sectors of textile industry on which overall survival of textile industry depend. They demanded same size of relief as given to value-added textiles. Criticising anomaly in policy they reminded that yarn manufacturing sector was notified as value-added industry for the purpose of import of machinery. Meanwhile EDB claimed having developed prototype of ginning machine much better in some respect than machinery us use today. Hard to believe Pakistani can do the feat, sources said, adding that the news needs to be confirmed. Sources hoped the machinery being imported so far will also be taken up for producing textile and hosts of others who have been deliberately ignored.