Local cotton trading depicted an unknown pattern-both sellers and buyers did their respective jobs honestly,spot rate rose within days by Rs 75 to Rs 3025. Rates in ready to above Rs 3200 and Phutti in Sindh was quoted at Rs 1550 and Rs 1625 and in Punjab at Rs 1600 and Rs 1700 until Wednesday.
On Thursday spot rate was quoted at Rs 3050on the closing day of the week was a Rs 3075, an increase of Rs 125 during the week.
WORLD SCENARIO:
The NYCE cotton futures having come heavily to depend on other grains price trend and no firm grip on its own stayed afloat. However, the December contract rose on the opening day by 0.14 cent to 64.77 cents a pound, while March rose 0.05 cent to 69.20 cents a pound. Fundamentally the market was keeping eye on pace of demand for cotton but the running business was provided by strength of buying in other commodity exchanges. Wheat, gold etc were scaling higher while dollar was subdued while crude prices combined supported cotton that settled higher. However investment fund buying also aided cotton surge. Players expected continuation of trend.
On Thursday however futures took a down turn sparked by a sell-off in other commodity markets. Meanwhile analysts commented cotton is keeping firm trend on general expectation of lower sowing in coming season. If belief comes true the same will lead to tighter supplies. But growth in global economies would lead to higher cotton demand. However had more comments like a Fedear Reserve meeting this week on US interest rate and the last day of trading for the month on Friday was likely to offer a change in mood in the market.
On Wednesday futures turned marginally weaker owing to buying by small speculators. Besides, sharp movents in other commodity markets failed to inspire similar gyrations in futures. Brokers were pessimistic about weekly export sales which they put down against previous one.
On Thursday speculative sales again hit the futures though cotton crop remained in the grip of every thing else. The cotton contracts took their cue from crude and grains markets, both facing volatile sessions. Meanwhile analysts said the weekly export sales failed to light a fire under the market since the figures were not sharply different from trade expectations. The futures December fell 0.34 cents to 63.74 cents a pound March lost 0.39 to 68.35 cent a pound. On Friday December contract gained 0,57to finish at 64.31 cents. March added 0.59 to 68.94 cents .
LOCAL TRADING:
The ginners and cotton consumers showed complete understanding to spare from any deliberate or just by mistake a loss. The ginners have been happy for the rise in arrival of Phutti and more so spinners and textile millers have shed all reservation and lifting without resistance of rising price. The spot rate leapt higher in quick succession which normally sends message of rising trend in ready.
In two days spot hit Rs 75 rise to Rs 3075. In ready rates ruled around Rs 3150 and Rs 3200 with chance of further rise. Phutti prices expeditions supplies apart, have been showing poised for a rise. The Phutti in Sindh ruled at Rs 1550 and Rs 1625 while in Punjab it was quoted at Rs 1600 and Rs 1625. On the opening day cotton demand offered substantial support to cotton as spot rate jumped by Rs 50 to Rs 3000 under rising interest by buyers insisting to import huge stocks.
The spinners and textile millers lifted over 15000 bales in big lots. Phutti prices ruled subdued Rs 25 in Sindh to Rs 1475/1525 and in Punjab at Rs 1525 and Rs 1575. Both the sellers and buyers demonstrated visdom, both interested in selling and buying without attaching much to price trend. The quest of consumers however, convinced that they are to ultimately surrender to the dictates of the ginners. Spot rate at Rs 3000 asking prices had touched Rs 3100 with inclination to rise above.
As expected Tuesday saw spot rate up Rs 25 to Rs 3025. Phutti too rose to sell in Sindh at Rs 1550 and Rs 1600 and in Punjab at Rs 1575/1625. However, while ginners don't want to hold back stock and sell, the buyers are taking advantage of whatever coming their way. The buyers lifted around 20,000 bales. The major players looking forward for the PCAG fortnightly report due within a few days to show perhaps handsome quantitative rise.
On Thursday only difference in trading was that slight fall was recorded in lifting, still some 17000 bales of cotton were sold slightly below or at the level of Rs 3200. Market took note of APTMA meeting in all its branches to consider how to tackle the odds. Phutti prices in Sindh ranged between Rs 1550 and Rs 1650 while in Punjab it ranged between Rs 1600 and Rs 1700.
On Friday mills and spinners ignored the APTMA call stop buying for a few days to arrest the price rise and bought more than 18000 bales of cotton. Some deals were struck at Rs 3200.
On Saturday buying spree continued gespite the high level of prices.more than 15000 bales changes hands. Spot rate was raised once again by Rs 25 to 3075.
TEX EXPORTERS SEEK POINT OF SAFE RETURN:
The textile industry crisis is close to point of no return and immediate and long term solution is called for. The above was contained in a strong appeal from chairman FPCCI standing committee on Textile and Ancillary who sought authorities should look into the day by day worsening situation of textile industry. The chairman invited attention of authorities that constant rise of cost of doing business offers tough competition with rivals China, India, BD and Sri-Lanka. In fact he expressed Pak exporters are losing orders.
Such discouraging is the condition that October has gone by yet no positive response has been received to enable exporters to stall constant decline. The chairman FPCCI Textile body suggested some solution for consideration by the government for revival of industry.
The problems on top he placed was reduction in electricity cost gas charges and utility rates. He desired all rates should be capped for one year for all export based industries. A part from above water supply specially for Karachi based textile additionally as they have to buy water from what he called "Water tanker mafia". The custom duty on textile related machinery and generators for captive power plants and their spare parts and related sales tax, if any should also be zero rated.
The rate of refinance should also be resolved, he urged efforts be intensified to reach agreement on duty free imports to North America, European Union and the US, being the biggest markets where success has yet to be able to match Bangladesh, Sri-Lanka and others are enjoying free import facility. Yet another areas where consulate and envoys can play positive role and try their best for products outlet the world over.
He noted budget and trade policy too disappointed exporters as they were expecting favourable response. If above are given due attention by the authorities, chairman hoped textile exports will not only be able to compete but also survive.
The chairman FPCCI textile body aggressively underlined the need to cap the prices of some item with a tendency to rise often to cap for a minimum of one year as textile exporters are not able to give a commitment of over one year thus lose orders. Positive actions could help industry prosper and survive.
DOES THIS OFFER SOLUTION:
The European Union agriculture ministers have agreed, agreeable without much fuss, to publish an annual list of beneficiaries that receive cash under Common Agriculture Policy (CAP) and how much each one has received. Actually some member states have shown reservation in giving out what they perhaps don't consider is any body's concern. Does this means that EU command not enough respect by its nearly two dozen.
Then- this word leaves much to be questioned. The EU is decidedly trying to be as much fair to globalisation by revealing what had till date been a guarded secret. What prompted the EU is discuss subsidies issue in top level meeting and understandably and without much a do about the issue and to reveal its policy under Common Agri Policy.
Whether the move is going to resolve the issue often raised by WTO members seems far too distant. The bigger of the EU members like France and Germany have with open heart called EU to consider any budge and to take for granted it is now obligation of over 100 WTO members to make up for any loss. The result won't be reforms in real sense. Some wealthy countries are microscopically looking at things not visible to naked eyes and being pointed out for even a penny gain. The end result will by suicide by people over burdened with debt. The need is not merely to be transparent but fathoming the cause that inspired 5-star hotel frequenting where tons of fine type rise and Salam thrown on the line little eare of which would serve millions dying with hunger.
The WTO big ones should pull out some more philanthropic ingredients from within to do justice. A long time past since finer sentiment has neither been heard not seen. The source with keener perception take self accountability as good. But their demand is that the more the delay WTO values are delayed to apply for bettering the life and living. The poor who are supposed to be beggars have not approached for favours. Thus the favours should come without asking thing in return. The move indeed was full with religiosity but more cunning seems to have stepped with had motive to ultimately stall the process. It is impossible to track down who that bad man can be. And all said and done in this connection can be forgotten entirely provided smiles rule on the face or all without respects!
HOW TO TACKLE CHINESE IMPORTS:
America is at peace, it has another full one year to receive textile products from China. In fact quota also run on in the other countries until the end of 2008. The case of the EU is different as textile producers are pretty worried as European Union faces a surge of imports from China from January, once quota expired for that country. China has over one billion mouths of feed, against countries that produce merely for the domestic products of pretexts. China has as far as machine and lobour are concerned is sufficient, barring cotton it has to import around two million bales on rising cost.
China apart India too is Chinese rival equipped with all the accessories and necessary wherewith to compete price and quality wise. The respective governments do supplement exporters need, but governments don't set up textile manufacturing plants, nor set up chemical and dyes units to save from imports of these. So far no one neither textile exporters not the government ever touched upon the fact how much textile machinery plants and chemical and dyes products imports add to high cost of doing business. But hardly a day passes when print and electronic media laments about the high cost of doing business.
A report datelined Shanghai says China's textile exports have jumped to 19 percent on year to $175.5 billion during 2007, while it spoke about industry's overall profits would rise to 30 percent to 113.5 billion yuan or $15.16 billion. Any figure - target is Pakistan is considered challenging not achievable for obvious reason. The relevant officials in China take it as a matter of pride that country's textile sector is gaining from greater technological sophistication and production capacity. Since shanghai was base for textile producers from all over the world including from Pakistan. How that units is performing - or has not yet started working fringe at vague line. But it is very clear that China without making it loud to hear is this country unpalatable months back or just after 2005 January when quota barrier was lifted, stretched hands of friendship to help textile exports grow in whatever manner possible. China has much much wider markets to supply products any nook and corner of the world. But ever visit and call was cold shouldered!
TEXTILE MANUFACTURING PLANT NEEDED:
Chemical products from coal: Chinese firm again approached for initiating project .Was the previous look hazy or miscalculated? During 2006-2007 quite often unfortunate argy bargy cropped up which however lasting friendship saved ties to prevail. It is prayed now any frivolous ground is not expected to interrupt. The matter is as gainful as discovering any oil well. While sources were happy to have been invited some Chinese company - in this case China National Chemical Engineering Co (CNCEC) expressed workable solution will be house warning.
This column has tried to invoke an answer why chemicals and dyes units are not set up, at least in the shape chemical city and dyes city to save tons of money going down the drains annually ever since this country was created. The chemical and dyes supplements if ever reached readers hard spoke that dream of an industrial Pakistan won't come true until plants producing petro-chemical products are established. The Sindh Mines and Mineral minister wanted the Chinese experts started work on producing petro-chemical products to earn foreign exchange.
To earn foreign exchange from petro-chemical products produced from the Thar Coal deposits. Strange words used and a layman can only conclude that minister meant to save tons of dollars by avoiding imports. In the first place let the agreement come and let the production start. Reply to this effect seems close by!
Meanwhile government can announce and in fact complete hundreds of projects but tons of dollar needed could be earned if chemicals and dyes cities start producing petro-chemical products or at least long awaiting quest for answer is round the corner!
TAIL PIECE:
The cotton consumers relax for a moment but go on seeking bulk cotton imports seems to have been holding permission to save the growers from getting ruined. The difficulty is in such demand and holding back demand that no one himself knows what's the idea behind. Whether or not is the problem or pressure on ginner by calling for imports in huge quantity. Since consumers talk about their needs and presumably give impression that they can dictate term if they join hands to do so. It is here the problem at regular intervals raises head as the troubled growers will be in to allow any quantity of cotton to be imported. Should if not be in the fitness of things that they must pay to the growers in full by lifting every bale lying with ginners.
The spinners and textile millers often fight back by telling that they are not averse to help growers but not only that cotton production is not of the size that textile sector needs but the quality also fails to match the world standard. Right but as the knowledgeable circles with years of experience say that all should think for a moment why there is only blame game and no appreciation. Is this not true that growers assure to meet the size of the textile sector and quality won't disappoint if their products are ensured reasonable return?