Movement was evident on the cotton market after nearly a halt in trading because the prices were on abrupt rise during the week ended on Saturday, June 21, 2008. The most important development on the last working day was the start of phutti arrivals, at the historical price of Rs 2,100 per 40kg.
The spot stayed put at Rs 3,800 while rates in ready were between Rs 3,800/4,000 per maund.
WORLD SCENARIO:
Since dollar was decided to send sinking and oil propping up, the cotton futures trade has turned to corn future to borrow the trend. Thus the cotton futures had substantial gains on Monday, the other days showed two way trading. On Monday, July futures rose 2.99 cents to 74.62 cents as Dec was up 2.79 cents to 82.24 cents a pound.
Following day came under investor profit taking to bow down, but players showed optimism, this may be sporadic case and rising trend in store for cotton. The weather is an acid test until harvest still away, but favourable whether report has not been reported by the pandits. Floods, which have hit the US Midwest must also be closely watched their impact on the prices that in turn will impact cotton prices.
On Wednesday, cotton contracts turned firmer as investors indulged in short covering. What the futures players saw was also supported by firming up news in gains. They were at the same time worried about losses in Texas from blowing sands. The loss was considered by suffering players between one millions acres and 1.5 million acres in Texas where half of the total is being planned to be planted. In coming days, losses are bound to support cotton prices to remain on the high.
On Thursday investors liquidation had depressing affection on cotton futures following the market just could not stand from sell off elsewhere on commodity markets. The nervous players trying to get a direction. The market is firmly sitting with the idea that in Texas sowing would be 1.5 million acres less owing to uncertain rain condition and sand storms etc, however, much will depend on USDA acreage report. Weekly sales or shipment provided no strength either.
On Friday, investor's modest buying caused futures to gain strength besides swirling wind hit cotton farms in Taxes. The spread too did its role as some short covering was seen in the market. Excessive rain and floods in China are also in view of the exporters who will stand gainers. However, players were looking for USDA planting report.
LOCAL TRADING:
The pace cotton trading witnessed on the markets appeared have made up some business lags in the previous week. The shocking higher jump or down drift was in abeyance, both sellers and buyers willing to keep sales purchase going. The spot rate had spilt over to the week in review, while rates in ready were between Rs3,600/4,000 per maund.
On Monday, some small lots were lifted while one 6,000 bales sale added to total of nearly 10,000 bales. The buyers are in need so sellers want to get rid of the stocks before new arrivals anytime now. The textile millers have been given all facilities they required but have they been satisfied is a different thing. The weather has been as uncertain in Pakistan where the rains have not come in the quantity they were desired, as rains have been playing hide and seek in Texas, the major cotton growing areas.
The strange thing is that rains have poured in as desirable way as farmers had desired and almost entire crop growing areas, be rice, cotton, wheat groundnut etc but neighbourly region failing in Pakistan. The purchase sales were slow on Tuesday, spot remained at Rs3,800 and rates in ready ruled between Rs3,800/4,000.
On Wednesday, modest business transpired during which 2,000 bales changed hands in ruling prices of Rs3,700/4,000 while spot rate was put at Rs3,800. There was a change in ginners outlook who are ready to sell remaining stocks but at their own dictated prices. The interesting end game as usual witnessed was exporters maintained to sell to millers with gains that suited their psychological level.
On Thursday, the firm price trend deterred buyers to venture into buying though the sellers and buyers both are aware that uncertainty over production prevailed. However, millers turned to forward trading for delivery in August. Two deals struck were at Rs3,650/3,800. The market embraced floating news about shortage of rain and irrigation water and attack of mealy-bug.
On Friday, market paced ahead with a solo deal. The sellers know millers still need lint for covering exports and hence prices are unlikely to be softened. Mealy bug attack report is being spread in low tone, but market sources felt what is in store, nobody is sure. The authorities have very recently claimed rather loudly, pesticides and other drugs are in abundant quantity. How much damage is done and how much will be saved with quick action needs to be seen.
On Saturday, the most important development was the start of phutti arrival in Punjab at the high price of Rs2,100 for 40-kg, for the first tine in the country. Two deals were recorded, 2,600 bales changed hands at Rs3,700-3,850.
SETTING MIND TO GIVE AND TAKE FOR PROGRESS:
All looked civilised following elections as victors and vanquished both boarded plane carrying sensible who seemed determined to forge country on the path of peace, progress and prosperity. Like good field sat on seats of reverence to change the past and give a complete overhaul. But the 2008-09 budget exposed the serene few weeks to volatile thud. The government with attractive slogan of Roti, Karpa, aur Makan and coalition with today's burning topic "Adlia ki Azadi" and opposition who had submitted to the will of voters who did not vote them to power.
However, coming down to those who had to vote to wise incentives and favours to beat high cost of doing business. They had not held out any promise, were shocked to know that R&D support for textile sector has been abolished. As a matter of fact they were expecting, no some of them were demanding continuation while other went a step further by asking for enhancement. The Pakistan currency had for inflation reason been tamed to go up to 78 rupees a dollar or more.
How many exporters would like to welcome, rather they would feel whether they had been standing on wrong foot. Surprised and shocked to learn and believe Pakistan was about to issue wheat import tender. May not be all Pakistan may not be many but few who remember this part of fertile land would supply wheat and sugar particularly to the rest of undivided India. However, supplies of wheat and sugar had no other intention but better the condition of dependents.
When own family members are in view, the rest of the world does not matter. Sugar not many months back was certainly without an iota of surprise, shock and ifs and buts in surplus. But minutes later, sorry not in minutes but certainly in a few weeks nation found arrival great crisis and imported sugar. It is said this particular issue and like issues caused to downfall the government that was.
The nation which has remained always in wait sees no end to it! Not is the time avoid saying "previous government responsible for economic ills" or "Budget termed jugglery of words and figures." Rather the people with their back to wall rise, learn to give and take.
AUTHORITIES BE WATCHFUL OF FACILITY UTILISED:
It looks absolutely ridiculous to advise authorities to watch how the facilities so fondly offered to needy, be the businessmen or exporters are used properly and desired results are outcome. The facility in view is like duty-free import of $50m new plant machinery specified for setting up of new industrial projects. Had this practice been usual, the result would have been greener and brighter Pakistan.
On Good faith, authorities consider extending help to desirous in business or exports and forget what for the money and resource were extended and at the end of the day demand voice turns louder. Trusting one is a different matter and meaning business from invested money is two different things. Asking at end results whether or not aim has been achieved serves as warning and ensures progress and more progress in the country.
Such overseeing is all the more necessary when the amount is big, hits at meagre forex reserves and whether the cunning sorts turn old for new. In this case local and imported had been mixed with a little tact government and nation suffer credit and development while receivers are never tired of more and even more. The over a dozen of TV channels do hold discussions on such talks and issues and participants mince no words to say that it is callousness of the government if projects fail but no defaulter is traced.
Thus is 60 years progress and prosperity is talked or in high on noise is hard today of democracy which is any country where ethics in nib, leader have in mind nothing loudly known that imports are most attractive business without much efforts.
There seems no other reason why in Pakistan particularly manufacturing is dreaded or investment in agriculture is avoided. Even exports of essential if any country has scope for, yields have more than one ways to exports in the name of exports. Fortunately essentials like wheat, rice, sugar, etc are produced much above the peoples need but once exports are allowed, imports are discussed on higher level in no time!
STEPS TO IMPROVE TEXTILE EXPORTS SOON:
The 2008-09 trade policy will shortly unveil comprehensive package to improve textile exports on continued decline way. The fact that textile exporters very much like to be part of any measure aimed at enhancing exports. It is hoped commerce and textile ministries will take note of this to inject meaning into the policy.
However, one most stunning aspect is that textile ministry in its very infancy has been once again thrown mercilessly into the lap of commerce. It was after years of unceasing efforts that ministry and possibly convinced about the need after watching China, India and Bangladesh, was born. The textile sector is unlikely to show disgust as long as commerce or finance ministries released nice sounding packages. The time should have been mentioned also.
The minister has often talked about making the textile exports cost effective-while he has mentioned to introduce new machinery. Like any relevant minister in the past the minister has not even touched whether, industry or government plans to set up textile machinery plants which heavily adds to high cost of doing business.
Similarly, relentless annual imports of major portion of forex earned is spent on manufacture of textile products, again harmfully adds to high cost of doing business, cumulative loss has been undermining edge of out products after 2005-lift of quota system. They, according to sources close to cotton and textile trade, are investment shy lately they had been talking about investment, which unfortunately seems to have not paid back or like thing they are not talking about.
The finance minister has touched their so-called "Dukhti rag" by enhancing the daily wage earners remuneration to Rs6,000 per month. However, they appear to be quite compromising as after the announcement of the 2008-09 budget hoped to earn inflated $20 billion. The textile minister has mentioned various training and human resources development manned by local and foreign experts. It is hoped that government itself is sharing the cost, which has negated all through the efforts to create and advance into world new and old markets.
COTTON MARKET NEEDS SUPPORT:
The cotton market during the last fading weeks almost stayed as non-existent. The buyers have no doubt to sift through their inventory and above all touch to pockets before laying hands on every available bale. The sellers have been left with few bales still to dispose of, but that does not mean buyers should turn their back form the place which ensures mills to move much before the foreign exporters are approached. Besides, keeping sellers and for that matter to the your most humbly growers in humour is a guaranty for availability of lint at mills' doors.
During 2008-09 the finance minister has desired a cleaner cotton availability, while textile ministry has put a target of 14.1 million bales. If the growers and sellers are left with even a single bale, the loss thus sustained, may be not big, discourages them to come to mills help with all the demand-this years case over 14.1 million bales with smiling face. Mind sir, even 2007-08 season did not offer them smiles.
A tradition of this ugly practice needs to be overhauled for not only meeting entire needs of mills but even the so-called quality and standard cotton that importers of our textile products embrace with smiles, least contaminated lint. A practice to press on various counts such as being of inferior quality to see sellers soften their attitude towards prices. Such pull and push to impact all sorts of cotton at wide variety of prices suits neither country nor the growers and, drains out hard earned meagre forex.
This year, if memory serves well, 40 lakh bales have been imported, costing rough by rupees one billion or like amount. If growers are given requisite water, inputs and know-how, drugs pesticides and information well in time, they will not fail to achieve the given target.
TAKING ON FACE VALUE:
Not many days before, question was raised in these write ups that Minfal or relevant authorities tighten belt before mealy-bug or curl leaf cotton virus (CLCV) or local pests appear on the growing on grown up cotton crop to tackle right from the beginning. Very encouraging indeed to learn that there wont be dearth of pesticides just in case. Pray, that moment never shatter the good hope of new season with new coalition government to revive the principle of smiles for one and all.
This came to light after a meeting of commerce and textile ministry attended by Minfal officials that farmers and agri authorities will act before pests do any damage. Like last season and in the past, problem is not that pesticides are in short supply or production or imports are delayed but, as is alleged by sufferers, pesticides are not found on the sales spots. They further alleged that the news about any pest attack reaches sellers, they disappear from sales spots and prices go 500 times higher.
While taking on face value fact that abundant drugs to fight pest are available, the sources hoped they will be on display in prominent places. In this connection one very simple fact has been realised by experts that mealy bug is very fond of soft sprawling leaves. A keen watch on them and application of drugs is effective step to nip the disease in the but yet effective way they suggest to root out the remains of the root of past completely and get rid of any plausible attack at all.
The farmers, many of them, are sharp and quick to tackle known diseases. But field agriculture workers are expected to practically help farmers up to farmers' and their own satisfaction. Continues shortfall in agri products should be taken as a challenge particularly now when food prices are linked with leading crops as well as falling dollar and rising prices as a results. This is nothing hard to achieve. Once upon a time our part had supplied food item to entire subcontinent.