Vacations have been taking tolls of normal trading in cotton as ginners should have been longing to let stock out lest import of cotton started. Monday and Tuesday all markets were closed and reopening session witnessed nothing very spectacular, except that spinners liked to see prices crash under go slow pressure.
Spot rate was unchanged at Rs 2550 until Friday when it was pulled down by Rs 25 to Rs 2525.
WORLD SCNARIO:
The NYCE saw another week passed IN expectation that rising trend in grains prices may prompt cotton growers planting cuts between 1.5 million to 2 million acres. The US National Cotton Council (NIC) after its annual meeting would announce coinciding with February 2,2007. The weekly export sales were also waited for it could prove to be motivating.
Anyway Monday saw futures closing down on speculative sales and that was all for the day as players waited to note the positive direction in which they had to move. The spring planting is likely to cut as past weeks had lured grains for more gains in them rather then in cotton. The report was expected on Friday.
On Wednesday futures turned pretty bullish on a diet of option related and speculative buying, though for a pace players eyes remain set on the spring planting reports supposed to show a substantial cut. The March contract was up 0.65 cent to 54 cents, May gained 0.66 cent to 55.11 cents a pound. In just few hours time traders looked for usual weekly export sales report for inspiration.
On Thursday weekly export sales showed down to 195,600 RBs against 254100 RBs, but above trade expectation. The plantings still away, which will be sending cotton to rise. However, the futures were down due to these factors. Meanwhile shipments were registered at 150,000 RBS down from previous 172,200 RBS. However,
Expected planting report would report substantial cut.
On Friday much awaited spring plantings report was not in hands of players and hence no indication of which direction should players move. However modest buying registered gain in futures. March was up at 53.89 and May at 54.87 cents a Lb.
LOCAL TRADING:
Closures abound the cotton markets on various counts including Ashura-e-Muharram and hence variations until the 1st session were not very much visible. The spot rate remained docile owing to pressure on ginners that spinners were hell bent on imports of cotton. Ginners had illusion over various levies on the one hand and package to textile sectors on the other. Concerned quarters are keenly watching the development and handling of the situation.
However, the market opened after Ashura though nil business was reported. The spinners were watchful of the cotton prices in local trading as they knew any imports news paralyses ginners. The spot rate stayed put at Rs 2550 without upcountry expense.
Even the second session on Thursday proved as lethargic and depressed. The only hope for both sellers and buyers was the fortnightly PCGA arrival report. In the meantime ginners rejected the report that foreign importers were ignoring Pak cotton for probably dirt. On that count too payment of the committed premium on contamination free cotton, as usual, was being refused.
They said they on assurance of Rs 50 premium went all out to produce dirt free cotton around 12.5 million bales but only 100,000 bales were considered worth premium payment. They suggested something should be done to stop backing out from promise.
Friday saw some movement in trading of cotton after a week. Around 10,000 bales changed hands as spinners found ginners relaxing prices. The spot rate was pulled down by Rs 25 to Rs 2525.
The PCGA report is due in a couple of days. Both the spinners and ginners have pinned hope in the arrival report.
On Saturday activity picked up after the Pakistan Cotton Ginners Association released arrival report till Jan31, 2007 showing a short fall of 8.9 bales. Over 20.000 bales changed hands, prices ranging from Rs 2350 to Rs 2625.
WITHERING WTO HOPE:
The wealth behind the resounding buzz WTO coming with smiles on the faces, hitherto long faces sent different message right from the day one. But the smiles often prove deceitful, as man reaches moon and explores the firmament. The third world countries looked at their raw materials that God gifted them in abundance, but were void of any technological claims.
The WTO background, which hitherto has not surfaced with a bang as resoundingly the WTO itself will make enlightened people that it was a bound fist promised to contain "sweets" but when children opened applying all their strength found that contained nothing. The third world countries have been told WTO, if comes in full swing it will have some 300 billion dollars in their fists. It was this assurance of opportunities they were attracted to.
The challenges that they will be left with no raw materials for their agriculture and mills were kept in the rigmarole of words, and optimistic sentences. In a haze somewhere it was reported that the world's few richest, finding no room in banks or in courtyard of their palaces have taken this route to miscalculated philanthropy.
These people took route of deception gradually and at short gaps they offer a number of things like cut in subsidies by the rich people and very lastly, in order to break loose the so far third world has been created another "Least developed countries". Unfortunate world is represented by such countries aspiring to touch the wealth and happiness of America, Europe, Japan etc.
Can they truly represent and secure the life of struggling people in real sense. A recent report headline seems more then enough to throw light that WTO states pose threat to farm exports.
PERCEPTION SHOULD CHANGE:
The faces of those who are ultimately responsible for the good or bad of progress and shine of economy and country look not as bright.
Naturally the textile sector which used to be hope of all rulers has not proved that worth to give present rulers genuine satisfaction. Hence but the option be in the hand of textile exporters and manufacturers whether or not to stay in lead under the new developing situation. Even if the knowledge based sectors spring up, to run along textile sector, the cotton growers and ginners who appear somewhat restive be reasonably "pampered" to contribute clean cotton culture so that at least cotton may attract international importers.
Reports say cotton is being paid much less in the world markets and American and Indian cotton are inducing importers to address to them. The fact is that growers have always stood by the mills on whose back stay authorities. But when they still have two to three million bales, the top earners of foreign exchange singly, start looking for "quality cotton from neighbours or far away to the US.
Today, as ever in the past, growers and ginners are made responsible for the textile exports to a great extent though they seldom appear satisfied with the not meeting even their input cost. All concerned must, say the sources close to cotton and textile trade, that these two are with little or no voice, in a country where Islamabad listens to the loudest.
Today the growers and ginners have been together being pressurised to be fair and supply clean cotton. A humble start has been made, if authorities look to their genuine needs. They have never failed to come up to the expectations of the mills or authorities but they stay at the end what a phrase explains at the receiving end.
SEEK FORTNIGHTLY FIGURES:
At a time when packages are being talked and sought the PCGA has sought fortnightly release of figures of lint import on the lines of seed cotton arrival figures. How naïve! With hosts of sharp shooters spinners take little time in working out how much country was going to produce cotton. And take even fraction of "Time" to place import orders in the name of quality cotton as importers of yarn expected. Thus the ginners come under heavy pressure to sell cotton at throw away prices or get it burnt on roadsides or in front of press Club. In the meantime most impressive sentences like authorities cannot allow growers and ginners to lose.
The ginners refused to mention whether in the last 60 years they were putting forward such demand for the first time, or they ever wanted to or asked Minfal or like things to release fortnightly arrivals of million of bales of quality cotton, Pakistan is unable to supply to the spinners and grey cloth exporters. if ginners have come to surmise the imports of imported cotton fortnightly. It is quite strange that they have borne the losses with fortitude for Six decades. Ginners have also not given to interested quarters whether they will be and how exploit the imports arrival figures to their credit.
However, for the time being they along with textile exporters watching the release of textile package. Most likely in the first week of February, if a report quoted PM is taken on face value. Besides, ginners must have been pondering over authorities pressure to produce lint free cotton and ultimately to let this country be known as clean cotton culture country. Recently some ginners in the city were also talking in nervous tone how to arrange Rs 5 per bale for standardisation. The answer was wrapped up in textile package that is likely very shortly, perhaps, circles said.
BETTER LATE THAN NEVER:
The caution offered by knowledgeable circles as authorities were back from Morocco nearly a decade back with load of hundreds of pages enunciating the challenges and opportunities was not taken in right earnest. Even infant class children are warned of road traffic to be careful about. And those who had lived to prosper and contribute worth of their qualities.
Despite this column cautioning to go through and reach the depth pages carried those who were supposed to have read, discussed and surmised the shape of thing the WTO drift prepared basically by people who have for centuries prospered on the innocence and wealth of down trodden was simply ignored. May be, they know the ways to overcome challenges in a different ways than what China and India were unaware of.
Today, but for the lust and cunning of some, those who would have contributed ten times more were kept on hold and today they are on board the same plane of confusion and disgust. The govts come with over enthusiasm to give the dwindling exports, economy and all the mess a different look, authorities are pulled back from the right course. They do not know whether to clear the junk piled up during the past or tackle the present ones., in the hearts of heart, without being convinced. But change of perception has not been allowed to lead this country up to the "dreams of the Quaid-i-Azam". Now as the genuine voice of some has been in the air govt would do to serve them and the economy and country well.
The garment manufacturers have been faced with painful place in that whose fault has is, not for the time to decide but by them self. Now the ever holding the flags of value- added goods flying high should come forward and convince to govt where is the fault and that govt and govt machinery should go down the bottom and evolve such ways that proved lasting. Unfortunately and God knows why authorities believe in ad hocism that has created smiles on only limited faces. Authorities should fight squarely and pick up the right to ensure a healthy and prosperous country Pakistan!
TAIL PIECE:
The old practice of refusing to encourage growers and ginners for the efforts to supply dirt-free cotton has again come to light as the ginners alleged in a report. Had they been welcomed for supplying clean cotton, the country would have come by now to be knows as clean cotton suppliers. The ginners in a recent report alleged that 100,000 bales out of 12.5 million bales only were considered for payment of agreed premium of Rs 50. Ginners should not lose heart. Time changes.
They have done right to discard claim that traditional Pak cotton importers had turned back because of quality reason. However, for reasons known to the spinners themselves why they prefer to import and spinners may have to think twice.
Besides, American cotton may be short by worth nearly two million acres. It is believed that under the circumstance importers of Pak cotton will stick to buying cotton as usual from Pakistan, more so, clean cotton will henceforth be supplied to them.