Trading and prices both showed improvements on the cotton market following week-long recess due to the Eidul Azha celebrations. However, business is likely to pick up hopefully for two three days. Spot on Thursday had been risen to Rs 50 to Rs 3025.
WORLD SCENARIO: Local holidays in US both restrained trading and prompt reporting though, the first report to hand resounded that futures on the NYCE on Wednesday had scaled to 33-month high owing to find speculative buying.
The cotton market was closed on account of Christmas. The ICE futures open outcry March cotton soared 0.54 cent to finish at 67.12 cents per pound and May was up same value to 68.49 cents a pound. When market reopened, cotton was supported by other grains.
Players said the cotton market was getting a robust push from expectations that US cotton sowing in 2008 will be even lower than the 18-year low of 10.847 million acres in the current year. On Thursday contracts seized substantial gains on the NYCE following previous days big jump leaving major players slightly surprised.
That other grains were in upward grip had impacting cotton price, besides USDA exposure of possible large cut in cotton sowing. The March showed a gain 69.19 cents a pound. The weekend gain showed a new 33-month peak said to be highest since 2004.
In WTO lengthy and heated debate is continuing in Geneva where developing countries are under pressure to concede more access to their markets the US is being pestered to show sizeable cut to their offers of subsidies to their cotton growers.
In current season acreage under cotton was 10.847 million acres. Economists see 2008 sowing at 9.185 million acres, lowest since 1983. However, the ICE futures on Friday rose by 0.11 cent to close at 67.89 cents, May added 0.19 cent to 69.38 cents a pound.
LOCAL TRADING: The Eidul Azha holidays preceding, long three days, then followed by the birth day of Quaid-e-Azam Muhammad Ali Jinnah, Xmas and new year's day, kept trading almost at a standstill, even though shutters were up.
As cotton market opened on Monday but the day was full of greetings not any deal. Lack of activity hurly-burly spot rate opened unchanged at Rs 2975.
The holiday mood had made buyers absolutely lousy, who despite being aware that local cotton was far favourable than the foreign lint. But spinners and textile millers, who had good bit of purchases a day or two before Eid holidays, suffered from lack of courage. The few players, shaking hands and embracing each other, found rejoicing too much to attend to some other business including trading in cotton.
As said above, the last days of outgoing year was correctly holiday season. The next day saw cotton market with shutters down on account of Quaid-e-Azam's 131st birth anniversary and Christmas. The remainder of December days, according the market operators, or even early days of the new year were meant for brisk trading.
On Wednesday nearly U-turn was marked in trading as consumers returned to attend to their needs aiding prices to give a substantial boost. The spot rate was considered for Rs 50 raise to Rs 3025 while rates in ready ruled around Rs 3100/3125 which also proved to be the asking prices.
More or less 12000 bales were picked up after nearly a week lull due to holidays and lurking holiday mood. Phutti forces both in Sindh and Punjab ruled at Rs 1550 and Rs 1600. Since the consumers had not been lifting, they are expected to try to cover up the big gap and prices will stay firm. On Thursday.
CONSISTENT WITH OBLIGATIONS: A report datelined Washington quoting WTO said, "the US must do more to reform cotton subsidies". Such advice streamed down from top people who matter. But the demand scores since Doha declarations in 2001, have been receiving only scant concern or attention of the US administration.
Instead the US under protest or as a matter of habit would give counter call others should do more to see a final deal. Brazil emerging out of 3rd world-fold, has been feeling the pinch and contesting the wrong to set thing worthy for the world trading pattern.
The WTO, unfortunately is facing the League of Nations like fate, before coming into being. Once the discrepancy is given undue respect and validity, an organisation however strong and judicious is bound to meet disruption.
The WTO for its rules, aims and objective seems more charitable like, unless some one has to read mischievous between the lines. Even democracy and vote has nothing to do or the most it does it plays serious damaging role, as growers have immense pressure on the contestants of either Congress or the Senate.
This fact has all the weight required to do or undo any plans to make the world a heaven. The WTO has been prepared with all the ingredients to make fields yield smiles, health and peace.
But philanthropists, who have planned this heaven has also a nicely decorated showcase to dupe the eager winner. The WTO compliance panel concluded in its 204-page report that US marketing loan and counter cyclical payments have led to an increase in US production and exports of cotton that have then suppressed world prices.
China had noted some legislation in making and had taken that against the interest of exporters and WTO rules. Perhaps the alert country hinted that both the houses of representative and senate had passed bills that would introduce a new $0.04 per pound incentive for cotton mills but not for exporters that however critics say is a thinly veiled resuscitation of step 2 (which had already been discontinues in 2005). All these are besides the question as a very top spokeswoman said that cotton subsidies and export credit guarantee were fully consistent with our WTO obligations.
CHINA BRACES FOR AGGRESSIVE EXPORTS: One could grudge how China braces for any opening to earn two breads for its sprawling mouths every day. Who doubts Chinese don't have to open up their purse for building oil price or for that matter, any raw material. They can't wait for change in prices, local or foreign, to produce textiles or any export products to effectively beat competitors.
If ever their products are faced with odds, they certainly reason for that and fight way out, without picking up facilities rivals are getting. The result is that the EU is as a headline speaks 'EU braces for end of Chinese clothing quotas'. Perhaps the Union had not foreseen, with precision what 'Chinese had up in mind to do when January 2005, protectionism or quota goes.
The result was that when the Chinese pattern or design emerged with its force, the Union found unbelievable flow of textile products from particularly India and China, the latter was planned immediately to hold in check. China did not go up in arms, but took support at the rules of WTO, and when the EU wished to sit across the table and both sides listen to the reason, an EU and China special quota had to be determined.
And now the quotas which the EU and China agreed as far back as 2005, are to be replaced with joint monitoring system that will be on the look out for new signs of an upsurge in Chinese imports over ensuing year.
Under the system, eight of the 10 clothing categories covered by the quotas will be tracked on the Chinese side through export licences which Chinese side will monitor the arrivals and landing in European ports. The pact ended hassle not only for those times but in futures also.
And as a trade association for European textile makers said the sense behind detailed explanation here was that WTO rules have enough room and flexibility to thrash out issues keeping in fuller view of interest of both parties.
The other day such novice idea was made visible to people here and some cases were ready for approaching WTO body and more wisdom will dawn to do thing without much hassle.
LET COTTON GROWERS KNOW MILLERS NEED: Textile exports constitute Pakistan's premier foreign exchange earners and there is no immediate threat to its top position from any exports. This fact calls for genuine and honest efforts to grow determinedly only a bit above or under that calculated requirement.
The stress is repeated size of cotton need should be only a bit above or under the real need not only of the millers but nation as a whole. The practice followed perhaps from day one till today is to exaggerate both high or low production size depending on the interest of sellers and buyers.
The consumers of cotton always dream bumper crop, much above needs, to enable them to lift at lower rate. Quite offer much above needs are produced the result was that growers had occasions to burn cotton out of disgust.
The sellers too have pretext to show much below crop or pretext that viral or pest attack was marked. Even heavy rains and so called heat too are used to manipulate cotton price per their whims.
Such a situation once in every season is deliberately created, benefiting either to buyers or sellers but the loser is economy, national kitty and government. The watch on the crop from sowing to harvest should be made a must to avoid figure game as is rampant at the present.
Taken figure game on face value, one or the other player, stand loser without doubt but the size of loss the cotton growers bear the most. The statisticians also place wrongly before the genuine planners on whose projection export gets boost and economy flourishes and exchequer stay brim. Are these qualification fit in our scheme of things? Are exports multiplying with each passing year and kitty has enough to cater to the development needs of this country? You have to find an answer?
SOUTH AFRICA JOINS INDIA, BRAZIL: If this day had to come, members had been firm to globalise the trading under WTO rules. Why necessarily six years had to be wasted on naught. In Doha, 2001, the honourable few members them had decided to, at long last, to give poor the right to live decently, more smiles than tears, there appeared the world still had some feeling of brotherhood.
But then talks, talks and meaningless meetings in Geneva and in capitals of enthusiastic member countries, at huge cost. Never during these years poor chiefs of the WTO felt proud to announce a deal is in sight in few days.
The deal is being cooked in conf's side room - but then a tired, futile sittings, Pascal Lamy once suspended talks - short of telling they are dead. Since then continued but to assure and reassure people some months were given, they never came.
Elections in certain countries edged away WTO talk, until the results. When frustration reached closest to climax someone said WTO now or never. When meetings and conferences failed to yield positive signs - the poor are close to shed his centuries old despondency was heard participants saying. The all well-known people running one or the other organisations stepped in to urge a deal is expedited.
To make the write up precisely some six months back the head was given as sure as death by the end of 2007. The more important people have now been taking for granted anytime during 2008. Apart from what was cooking in Geneva, India and Brazil were urged by the rich to concede more access to their market.
The latest from Geneva is at last says that South Africa, India and Brazil are mulling a slightly softer stance in the increasingly acrimonious negotiations over a new global trade treaty.
Let the most needy get what they have originally been assured. But is proper to quote the words of Pascal Lamy, who urged WTO members to conclude talks speedily to "avoid spill-over into 2008, when the US presidential polls is expected to make it hard for Washington to negotiate." The words are hapless and leave chapters to reach the - what think again and again and again!
TAIL PIECE: The appetite for investment is insatiable for all countries, its more true in case of Pakistan, where people so eagerly stay in look out. So are the investors eager to pour money anywhere on earth from where transfer of gains is safe and secure and handsome.
Before venturing into investment, they invariably desire efficient and cheap labour, well developed infrastructure and departments, where filed move not in days and weeks but hours and minutes.
The report has its origin in a coverage from Singapore where Ayaz Ahmed chief executive officer, infrastructure project development facility, told an inaugural session of Macquarie mainly three things (a) a number of attractive project will be showcased in government organised "Pakistan investors Conf in Islamabad in April for investors
(b). That Pakistan is building a robust pipeline besides downstream projects worth $4.1 billion and (c) public private partnership policy likely to enhance confidence of top world players to invest in infrastructure development projects in Pakistan.
The immediate catch was Macquarie, who is known world-wide as largest infrastructure advisers, investors and managers with a diversified portfolio assets valued at more than $120 billion in 25 countries.
One can hope in April next when Pakistan investors conference is held with wide variety of fields of interests for rich investors, varied knowledge, technology and experts will be here with intention of huge investment. It is hoped January 8, 2008, elections are held in an atmosphere of peace and tranquillity, which will add further to success of the investment conference.