Cotton prices moved up and down under impact of heavy downpour causing hike in demand and fear of damages may push prices still higher, but inclement weather reversed situation and the prices returned to opening level Rs 2575, during the weekend on September 9, 2006.
WORLD SCENARIO: The New York cotton slipped during early trading as speculators liquidated stocks awaiting crop report next week. Monday was closed holiday on Labour Day holiday. The futures on Tuesday fell 0.39 to settle at 53.59 and March lost 0.35 to 57.17 cents a pound.
On Tuesday when market started session modest speculative sales sent futures to dip. The players were looking for direction in the face of dearth of news. Meanwhile, the analysts said cotton market may drift in a band until next weeks release of monthly supply/demand report from the USDA. The data, they said will provide the latest update to the global cotton supply/demand picture.
Chances were the investors would be reluctant to stake out strong positions. Most of the traders expect the US cotton crop will be given at 19.5 million bales- down. Besides, they were eagerly also awaiting changes in figures for China. The situation did not change as speculative sales hit futures sending December down 0.49 to 53.41 and March down 0.46 to 57.06 cents a pound.
The traders were caught in two minds and wanted some news to have grip over trading. The market awaited likely change in estimate for cotton output in 2006-07 of 20.43 million bales. Other considered estimate to rage as low as 19.3 mln bales. Traders are also keeping a watch on figures from Chan, India and Pakistan.
A day before the week end futures slightly strengthen as speculative funds were continuing to press futures limping but along with that trade buying and export business were helping market prop up. Meanwhile, market is awaiting production update next Tuesday and other number from Chan, Pakistan and India, which will provide definite grip on the ways trading should move.
Th week closed with losses owing to continued speculators selling to press the contracts as major market players wait for the supply/demand USDA report on Tuesday. The traders have been disillusioned by the developments. They are hoping on the Texas condition to reduce the crop estimate to below 79 m but others hope no change was likely. However December lost 0.51 to 52.65 and March shed 053 to 56.24 cents a pound.
LOCAL TRADING: Heavy downpour in early days of the week upset trading and prices both during the week as excess rains created apprehension in the minds of cotton consumers that prices would go up and fast. The buyers pounced upon cotton and ginners awaiting for such a moment pushed spot rate up by Rs 50 in one stretch exposing the idea of similar rise in ready. The spot rate looked pleasing to ginners at Rs 2625 with the rise.
On Monday inclement weather prompted cotton consumers to lift as much as possible. The ginners lost no chance to raise spot rate by R s50 to Rs 2625. The rumours preceded news about crop damages, around 6,000 bales were lifted. The buyers were not one in perception as some other preferred to wait to see the result of heavy down pour.
Since rains created havoc in cotton belt and residential area alike, drew most of the buyers to start buying at whatever cost which at the end of the day showed buying between Rs 2,680 and Rs 2,700. More or less lifting matched the previous days. However, inclement weather took to better turn and cotton buyers wait brought friction. The fugitive sun was out of clouds and Phutti arrivals streamed into ginneries. Spot rate was unbearable at Rs 2,625 and ginners reconsidered it so as to keep buyers in the market.
The entire rise in spot rate was taken back to give spot rate its opening level at Rs 2,575. The rate in ready too dipped and the highest value for quality cotton was quoted at Rs 2,625. However, late in the evening brokers expressed over the sudden sharp drop in spot rate as a bid of the ginners to take advantage of the weather condition. Big lots' sales were noted which numbered the two previous day buying. The last few days had attracted consumers to buy cotton on hiking prices as fears compounded rain would create a couple of problems leading availability.
The pulled down of spot rate on Wednesday encouraged buyers to indulge in almost panic buying. Though rates in ready did not come down as fast but consumers had in mind that target of 14 million bales was not possible. The maximum rate for the quality cotton on Thursday was Rs 2,715. The spinners and textile millers have not tired though they started mopping up operators since Wednesday when prices began to move higher.
On Friday over 3000 bales were bought in small lots, however spot rate remained unchanged but in ready prices ranged between Rs 2,650/2,675 . On Saturday modest business was witnessed as almost all the mills in Sindh remained close due to heavy rains, though some transaction took place in Punjab.
WTO CRACK HAS OPENING: The European Union had taken leave to rest after his countryman and WTO chief Pascal Lamy compromised with an unyielding leadership and declared ongoing talks suspended on July 24, 2006. When other group more important like CAIRNS hinted EU participation in September 20/22 meeting in Australia, latter had also offered regrets.
Incidentally WTO chief had also took un -announced retirement until close of the year after hectic bid to get talks not only going but creating a history after breaking the arrogance chains, but the world knows he submitted.
He also begged excuse for witnessing CAIRNS meeting progress from a distance. In the meantime two bids from super power were made to get an early start but those who mattered felt that mid term US elections are a great hitch. It was being watched by some interested quarters that how the ray of hope would reached them. But the ray had to come in supers' power own typical way. The elections intervened and chances were that republicans were likely, as political pundits calculate, to lose men in Congress.
If the democrats win control of Congress they are likely to insist on terms the White House could strongly oppose with the negotiations on hold, hopes have evaporated of finishing the round this year as Bush's fast track" powers would no more be there. This the negotiators believe would push the hope of a deal away to July 2007. Lean hope is being pinned in meeting of trade ministers from WTO states on September 9, 2006, to assess the Doha round's situation.
The EU trade Chief Peter Mandels however sees wonder for WTO rescue. On being questioned why should be so hopeful about some positive outcome he had to track pass swinging unsteadily. He said he saw renewal of commitment, reassertion of value and economic benefits for the global economy as a whole and in particular for developing countries. The knowledgeable circles did the siting and came to conclusion that it was time Pascal Lamy should have opened his mouth and treasure of experience.
But it is known to few whether he would be or not be in the meeting in Rio De Janero. He has already been looking down since declaring the talks suspended. The trade minister who sees window but his words do not explain in that direction he in broken tone replied to questioners that for the deal that we need, we need to do every thing that we can to maintain confidence in what are very difficult circumstances.
BRAZIL'S MOVE BLOCKED: The use of pleasing and effective words available in the world known dictionaries backed by arrogance helps big ones to stay in leading world organisations despite violation of rules by them. The WTO has been one platform to block Brazil's move on cotton aids. The towering institution has once again ruled against the US on charge contested by Brazil.
Thus WTO impartiality and respectability has gradually been using initial charm in WTO which is supposed to lift millions of poor. The 148 members of the WTO had moved closer to give it the size it expected but Pascal Lamy without so willing, stripped of powers. The powers hardly with any such desire received shocked which the member nation realised as to why?
The saint and pirs who rally have the quality can- not just see people dying with hunger. They pass on the morsels in their hands to begging man. But today modern philanthropists weigh the gains despite sacrifice reached to million. Brazil has been loser due to billion of dollars doled to rich grower. Beside itself a big loser Brazil is on top of 3rd would poor out to deliver them food, education, health etc.
Brazil has already won its case against illegal subsidies, but the loser wants to appeal again. India another important member of G-20 and spokesman and fighter of injustices and help emerge completely changed world. For a long time in the past WTO was projected as the good hope mainly for the have-nots, but the delay it has made on reaching them exposes reservations in the minds of HAVES, they have been duping the silent 3rd world poor as demand more ground from them than what they want to part with.
At long last they verbally said to have stopped step-2 contribution and 60 pc subsidy to agriculture. This Brazil says will tantamount to keep cotton growers in Asia, S America and Africa out of business. Those powers who are rich in all sorts of complex technologies and tonnes and tonnes of lethal weapons of sufficient to destroy dozens of world want still more in unjustified access to their markets.
The time has probably come to tell those who stage drama to make the sick world healthy by their words that "round has been billed as a once in a generation chance to inject up to $300 billion a year to the world economy and lift million out of poverty". The powers are more than satisfied with the regional and bilateral accord in pockets.
WTO: CONCERN FOR COMB The hope of million of have-nots in WTO, now lying on sick bed is being sympathetically remembered by former chief Supachai, who nursed the organisations for three years.
A fortnight or so, after leaving the limping WTO to mourn its near death people have woken up to inquire about health. Relevant knowledgeable circles wondered how people like Supachai desired earnestly to revive it. Only a year back associated with the organisation Supachai knew it had made progress, which he felt should be strengthened rather than let it fail. He apprehended its collapse now will take year to get back to life, Supachai hurt thoroughly expressed he was simply sad on big powers move on switching on liberal and regional accords, which according to reports are going beyond US control. He authentically said that there was no truth that Doha round had no worth to show result. It would be recalled by people that while giving sterling support to WTO. Powers went on with making regional and bilateral pacts.
Such dedicated and firm steps beyond America to Arab states, in Asia, India and Singapore etc. Even Pakistan is contemplating bilateral trade and RTA hopefully by year end. But strange comments came when relevant people returned from a visit to USA and said that how America will be able to balance and efficiently handle with nearly reaching half a dozen accords. Can under the circumstances Pak hope it will get the assured accords and be that meaningful? Apart from Supachai, recently Bush himself broke his fast by giving a call that negotiation should start as early as possible. His trade negotiator was latest who supported bosses call to start talking. But the incumbent WTO chief Pascal Lamy has not been planning any such move nor his European Union has any interest now to participate in talks that will prove to be talking sake. After a fortnight CAIRNS meeting in Australia may seize the opportunity to talk but chances are slim, both of talks and any positive result. Supachai's link with WTO and that he warned that bilateral trade deals and regional accords were no alternative to multinational pacts.
MACHINERY LOANS FOR SETTING UP PLANTS: Should not machinery importers be induced to think about setting up plants or form joint venture for the purpose. What's the use of allowing loans is how PTEA chairman Rana Asif Tauseef asks fate of Rs 180 million ,which reflected decline of four percent instead of 40 pc jump during July 2006.
The governor SBP appears to have come under pressure as she has not learnt to encourage game of loss. Only very recently she had hinted that the trade imbalance should be eliminated by reducing imports or enhancing exports. A recent UNDP report showed India earned for one kg made up 8.60 dollar, BD 8.67 dollar, China 9.85 dollar for the same quantity. This country earned for one kg export 5.35 dollar or like amount.
The knowledgeable sources did not express surprise, as facilities derived could at least enable them to export products. Once again nervous as things are developing on textile export front authorities considered allowing loans for textile machinery. The textile sector has record of seeking loans on promise of showing big result.
But never in history export ever exceeded imports. Again on the same perception that machinery improve manufacturing, engages, street urchins in jobs and exports go up. All these will also ensure respectability internationally. It is competitiveness that matters and that is a force of all possible ways applied to make the products cost effective sources were surprised how 76 pc imports of dyes and chemicals and textile machinery imports would meet the challenge from those countries which are self sufficient.
Unfortunately authorities happily allow concession and zero rated but forget to monitor the result. They think to make some public sector , private sector ready to prepare them to set up machinery plant/plants. The product will be much cheaper . But for 60 years there is complete silence. Sources pointed out that a recent supplement on chemical and dyes hinted strongly emphasised the need for domestic production of some active ingredients, without which all will agree that Pakistan has not yet started on the road of progress and prosperity.
No wonder rivals are taking full advantage of Pakistan's weakness and unfortunately all who could stop this drain out are as satisfied as they have made Pakistan self-reliant. Whatever new rozgar schemes are coming up have no match to make textile sector self reliant by selling up new plants. And a network of petro-chemical based industries.
TAIL PIECE: An advertisement of thanks to PM possibly in return for the favour textile exporters had demanded and received appeared on September 6. The favour was related to granting them special rate on outstanding loans. The exporters will probably able to recall their words of wisecrack that huge investment of Rs 180 billion in textile machinery import should have reflected 40 percent jump in textile exports instead of 4four pc decline in July 2006. It has been hoped that similar spirit of benevolence will continue for ailing textile industry. Except in very early days as a child we would hear "made in Pakistan".
God Knows! But then money lost crept in and with that started down gradation and has not recovered ever. Will it ever be a fact that foreign countries products will have the tag ":Made in Pakistan". Will, to make good the past losses, the chemicals and dyes, taking away annually huge amount in importing them, will Pak own textile plants produce textile products that would sell like hot cakes!