Rains havoc have prompted spinners and textile millers to grab every bale on offer minding least about asking prices which have bounced back to Rs 3000 per bale. The rains if not ceased right now buyers think a fresh burst of prices were likely. The spot rate held for Rs 2850 a couple of days to close on Thursday at Rs 2825.
WORLD SCENARIO:
The futures on NYCE turned virtually -vulnerable after holding former size for two weeks owing to no definite direction in trading. Thus the trading on the opening day escaped setback as fund buying offset losses occurring due to profit taking.
The first session therefore saw futures end mixed. October down 0.24 to 63.24 cents , December up 0.15 to 66.23 cents a pound. The futures on Tuesday failed to resist fall due to speculative sales, though futures have not entirely given way to weaknesses. The cotton prices have lately strengthening as was always expected acreage may be cut during 2008 season. It has never been claimed that farmers expect much less subsidies they had been receiving for years. However, surge in other crop prices are being brought in fore to justify support to cotton prices.
Analysts converge on point that prices may scale up to 68 or 69 cents a pound in the days ahead. On Wednesday futures sustained downward drift as speculators continued to perceive grain in sales. But side effects supported a fall that could be bigger. The major players observed that the technical profile is weak. The fundamental had trouble in breaking in breaking below 65.15 cents basis December. The market players now await weekly export sales, which are expected to show relative weakness hence shipments too, appear to be fragile.
On Thursday speculative buying intervened sending futures surging also aided by grains which posted in Chicago. The market operators were of the opinion that fund buying was strong enough to affect price. Analysts got a boost because the surge in corn and wheat prices meant cotton plantings in 2008 may see slashing. ICE futures open outcry December cotton contract rose by 0.72 cent a settle of 66.72 cents a pound and March gained 0.94 to 69.96 cents a pound.
On Friday the overnight strength on NYCE bursted closed sharply lower on the week-end, obviously owing to speculative sales. the analysts foresaw the momentum of selling is unlikely to cease any time soon, anyway, December lost 1.62 cents to 65 and March was down 1.44 cents a pound. Players said unlike Chicago with increased demand (for grains) US cotton is losing export business, a deteriorating fundamental the market will ultimately have to face.
LOCAL TRADING:
The cotton consumers had buying session on the cotton market to their hearts content from day one. The prices came never in their way that ruled around 2800/ Rs 2900 while spot rate staying at Rs 2850 and adding Rs 25 later to Rs 2875. and finally coming down to Rs 2825. The buying had no reservation as spinners and textile millers developed perception that prices will never be so favourable in view of the shortfall in larger consumers in China and even Pakistan had been seeking permission to import.
On Monday beginning was made from fair buying at 8000 bales most deals struck at Rs 3000. On Tuesday buying improved as consumers plea for importing low quality cotton from India was not in their favour. Nearly 9000 bales changed hands.
On Wednesday there was no respite seen in buying spree. The spot rate was raised by Rs 25 to Rs 2875 without weakening the buying trend Phutti in Punjab was selling at Rs 1325 and Rs 1350 while in Sindh selling at Rs 1400 and Rs 1425. But buyers were in no mood to consider price surge or fall. Spinners and millers had good view of crop in the country that may not help decrease in prices but wont go higher beyond their export parity. The ginners were receiving good quantity of Phutti all the day and they had no time to think to raise prices.
On Thursday buying was sustained as ginners were said to have good view of shape of things to come. They were making cotton available instead of puling up. Over 13000 bales were done on the day.
On Friday millers remained busy in lifting more or less 11,000 bales of cotton at prices ranging between Rs 2850/ Rs 2900 in Punjab. Phutti remained almost unchanged at Rs 1325 / 1350 and in Sindh it bulged by Rs 25 to Rs 1450 and Rs 1475.
On Saturday notable changes were I reduction in KCA official spot rate by Rs 50 at Rs 2825 and the curtailed range of lint prices between Rs 2875-2900. Some 9000 bales changed hands.
QUALITY CONTROL HURTS:
How difficult it was to call for keeping control on their unceasing laughter. Those who could understand Pak exporters problem and those including exporters themselves that having together does not mean licence to do anything one likes to do. A very senior journalists some years back got so much burdened with the feeling that Pak was void of any constitution till then.
He had in his -mood and rightly so, a constitution binds people together in a way they have to feel for one another in safeguarding other's interest. But those who command authority without taking into consideration that others who live around should be regarded as human beings. Thus the idea that manufactures make and export products without considering importers who import have been ordained by certain rules and regulation.
But when the news was printed in a latest newspaper edition that quality control issue hurts export many thought the importers had unjustly demanded a certificate from an accrediting testing laboratory under ISO-14025 and the country had been urged by the WTO to ensure products quality control.
The election prone govt has been in state of harassment ever since March 2007. Eexports of all types, particularly textile products need package engine to pull . But how to help the WTO built problem which of course is not only Pakistan's rivals India, China and other countries face but they have been used to.
While Pakistanis perhaps have not come in contact with quality control centre of the Pakistan Standard and Quality Control Authority. Sources close to exports tried to make those who are not used to control and rules and regulations and bases their trade, commerce and even exports on friendship basic. The friendship-ridden countries have indulged in teaching global trade and exports partners to learn to step in measured ways to yield gains to all.
So far a number of countries including as small and little known Vietnam has learnt to live within bounds of WTO and reaping gains. If WTO deal is completed as is loudly proclaimed within 2/3 months or by the end of 2007 then those will have not learnt to live within prescribed bounds.
RS 100 MILLION WORTH COTTON GUTTED:
Once or several times, one has regretfully to experience that such and such cotton factory got gutted. It is only exception that such painful accident takes place in autumn particularly. Autumn is dry season with favourable evening wind to flare up a spark. Such days should not be feared but must keep all of us cautious to safeguard such precious stuff like cotton which unfortunately eats away bulk of hard earned foreign exchange on imports. But despite such feelings and advice one or two incident is a must-. Even this season, the other day a factory in Sanghar suffered the tragedy.
Al-Rahmat factory in Jhol town said to have been suddenly engulfed by fire gutting thousands of cotton bales to ashes. The gravity of the situation could well be had from the paucity of fire bridge engines in Sanghar. Only one engine is available to cotter the needs of several mills. Fortunately on this occasion two more engines could be promptly sought which fought but failed to save cotton worth Rs 100 million. The report pointed out that Sanghar has several cotton godowns and factories under umbrella of only one available engine at the doorsteps.
Today the spinners and textile millers are complaining about shortage of cotton and have been unfortunately draining out billion of dollars on imports of cotton at our growers pangs. The loss in Sanghar factory is definitely going to add to high cost of business. The autumn stays in bloom hardly for a fortnight or a month, but demands caution to avoid unnecessary loss from fire. If initial safety measure is at hand can ensure safety of millions of rupees and help in meeting spinners and textile millers requirement.
The global system has put Pak exporters of textile products in hot soup. Because of good investment interest, trained and qualified labours and trying markets in all the countries of the world. Trying only US and EU is hoping against hope as the much more equipped Chinese and Indian manufactures have gradually grabbed it equipped exporters in this country. So, autumn should be takes care of not only by cotton growers, ginners and textile millers, but all godowns and factories.
BILLION DOLLAR MACHINERY IMPORT:
That this country drained out billion dollars on machinery (whether new or used ones is besides the question) import won't be lamented, nor will even bothered a bit. Those who spent have without least concern they will ever be asked how much billion dollar will yield back to the exchequer. At least during the last 60 years or around accountability word has been heard only. Authorities who sanction are under certain obligation and also those who back up sanctions honestly believe that for any country imports of machinery are guaranty for creation of more jobs and more manufacture and more export.
What however toiling and working people of Pakistan heard was imports of wheat, sugar etc which at the harvest time were proudly announced to have been in surplus, imports of textile machinery, agri implements like tractors and parts of stuffs like TV or four wheelers for assembly locally.
China and India are grudged for exports at competitive scale. This country has been bestowed upon by the most merciful God with high-class cotton both from quantity and qualitative point of view. But those who are beneficiaries of all these have grudgingly avoided pouring part in investment to develop exports.
The govts in Pakistan have suffered at the hand of immature elections. The bad practice is promoted irrespective of the facts the financial institutions have been made autonomous and like empowerment. As against this the private bodies traders and businessmen enjoyed thoroughly weak-made-govt as non of them ever told self seekers, according to knowledgeable circle, to mind their business and let govts to their own.
In private talks, desperadoes prayed in whispers God provide this nation with General Khalid and Ataturk but they failed to deduct the type of leader they in their minds. People in general seek themselves, for a feast or few dips or for a business hence. Thus leaders and people heave kept dreaming for smiles on every face - 180 million. But this for despite six decades, licenses have been issued without conviction whether or not business license will be utilised by the lucky man or the man will sell that to some other person and can some headlines be seen in newspapers that "Cabinet shy of taking hard decisions" -!
BD GARMENT WORKERS ON STREET:
The enraged BD textile workers took to street despite a ban on protests in emergency ruled BD to demand back pay and bonuses. They forced most of the factories in biggest industrial zone in Tejgaon near Dhaka. Police used batons but brought workers to peace by inducing factories owners to sit with workers and settle the pay problem or face flare up again. In the fracas some 50 workers were injured and a bus was torched stated to be when it hit striking workers. The garment workers unity forum said the flare up was due to the fact that only 20pc of factories out of 4000 have implemented the minimum wages fixed earlier.
A report said the mly backed govt has banned all kinds of protests and rallies and warned that it won't tolerate any unrest in the textile sector, which has emerged crucial to impoverished BD's exports earnings. According to reports BD earns through garments exports around $8 billion, without growing a bale of cotton in that country.
As is divulged by Pak textile exporters BD along with Indian and Chinese textile exports get facilities and subsidies to beat perhaps other countries. May be Bangladesh govt is rich in gas and may have been liberal but about cash subsidies all countries are quite.
The BD textile workers may have been exploited as is evident from the story being narrated here. The garment makers are also hiring some Indian workers and even Pak value -added products manufactures had tightened belt. Latest is somewhat hush hush as textile leader are shying way and ask some one to inform they are not on seat.
Any way despite upper hand Pak textile exporters have to learn from once upon a time their country men. The jute that used to be country's premier export commodity has been pulled down lately with the textile potential racing ahead. Not to forget the fact that BD has been gracefully awarded LDC (least developed country). Under which BD is made qualified for exporting to all countries without import duty and particularly Pak choicest markets in America and European Union. What in the report is missing is what page one picture prominently says "Bangladesh pharmaceutical workers chase garments workers during a demonstration."
TAIL PIECE:
There are hundred and thousand prefer to go without meal if they can avoid, than to dress well and stand in front of bank counters for obvious reasons. However, what draws attention most are headlines in newspapers with intrinsic meaning to call for form govt to help, but who is in white dress sitting together discussing problem and to pay the exchequer if due. One such headline says! Bankers tell SBP governor they are left out in the cold: why? For proposed financial services act.
They protest is nothing but show that any control or like thing is unacceptable. Another headline is "industry in a fix over fall in textile exports: the expression is apparent that the govt alone can facilitate and any cure in beyond the reach of exporters themselves. Lack of funds causes failure of anti-mealy bug project". The focus reach right into finance ministry's corner - the experts believe the mealy-being manageable if due care is taken at the initial stages.
But what the report some days back said was that the medicine primarily was allegedly evaporated from the market, and somebody showed interest in manufacture of only medicine said to be most effective. Whether manufacture of mealy-bug killer has started or imports ensured but the reports had claimed the medicine available at Rs 500 went as high as Rs 1500.