Buying support was panic like as the sellers behaved favourably- buyers had X'mas shipping world and export products flow and any lag will hit forex earning hard. The spot rate swung a couple of times both ways.
WORLD SCENARIO:
The cotton futures was likely to stay firm to firmer until the end of fears about storms such as one of Gustav died down but fears of Hanna, Ike and Josephine were strong when cotton futures market reopened after a day's closure owing to Labour Day holiday. The met office report was discussed by traders that news behind tropical storm Ike. Both were keeping westward multiplying fears of likely damage if cotton areas hit with gusto.
On Wednesday the US cotton futures finished lower as losses in other commodities pulled down fiber futures, but analysts said the full impact of Hurricane Gustav has yet to be measured and already-vulnerable crops may need to survive storms Hanna, Ike and Josephine next week. Key December cotton futures closed at 69.69 cents a lb., a 0.49 cent decline. December's contract range spanned 69.30 to 70.33 a lb.
In after hours trade, December cotton was down 0.69 cent at 69.49 cents a lb. By 3:44 pm (1944 GMT), December's contract tally came to 7,594 lots, after a session of moderate selling. One broker said an options trade earlier knocked cotton off its session highs.
On Thursday, the NY cotton futures ended steady although the firm dollar and weak commodity markets had earlier depressed fibre contracts, with brokers saying the trade is mulling the impact of a rash of storms coming in next week. Key December cotton futures finished unchanged at 69.69 cents a lb. The contract moved between 68.10 to 69.96 cents. In after hours trade, December cotton sank 1.37 cents at 68.32 cents. Volume traded in the December contract stood at 11,072 lots at 2:33 pm (1833 GMT).
On Friday, the NY cotton futures finished at the lowest level in nine months as a weak US job figure underscored fears that fibre demand will soften in a struggling global economy, analysts said.
Key December cotton futures sank 2.62 cents to end at 65.84 cents per lb. The contract moved between 65.61 to 68.59 cents. Volume traded in the December contract volume stood at 24,638 lots at 2:55 pm (1855 GMT).
LOCAL TRADING:
There was no respite in cotton buying as prices showed downward trend and govt package, which boosted buyers courage in view of the already orders in hand and likely to pour in, spot rate was unchanged at Rs 4075, and ruling rates in ready was Rs 4075 to Rs 4150. Phutti was selling in Sindh at RS 1950 and Rs 1975 while in Punjab phutti prices were between Rs 1850 and Rs 1925. The buying rose to the size of 30,000 bales. The surprise part in the size was that both millers and cotton exporters lifted to meet their forward sales.
The second trading day was also full of life as 25000 bales of cotton were lifted. However, so much rush of cotton buyers naturally prompted ginners to raise spot rate by Rs 50 to Rs 4125. Lint was also marked at Rs 4200 the highest ruling. The two days buying, no, infect buying streak that continued since the previous week gives impression textile exporters have increased position notion. The sources hope the continuous jump in cotton lifting showed that they are determined to recover the losses they have been suffering. On Wednesday market was marked stable owing the extensive buying support extended by mills and spinners who were hell bound to cover their forward requirements to make up exports losses as far as practicable.
The spot rate was unchanged at Rs 4125; phutti in Sindh was selling at Rs 1950/1975 and in Punjab at Rs 1850 and Rs 1925. The lint buying nearly matched the earlier two days, showing mood of the textile exporters to, if possible, unlike the non-textile exports, which rose despite high cost of doing business.
On Thursday brisk trading was seen on the cotton market as exporters were the active buyers to cover the forward buying. The official spot rate was unchanged at Rs 4125. Phutti prices in Sindh were slightly lower at Rs 1900-1925 and in Punjab, the rates were also down at Rs 1800-1900. Market sources said that mills were also a little bit active as they were bound to meet export consignments in the near future. Commenting on the latest developments, some brokers said that the exports may rise this year as exporters were showing interest in fresh buying due to attractive dollar's rate.
But one thing is important to note that they noticed some speculative buying by the mills and spinners as they were under pressure following the reports about the slight fall in current production. About 21000 bales change hands within the close price range of Rs 4075-4175.
On Friday speculative buying was again witnessed on the cotton market as some manipulators were trying to create an impression that the crop size may be short this year due to pest attack. The official spot rate was unchanged at Rs 4125.Phutti prices in Sindh were more or less unchanged at Rs 1900-1925 and in Punjab, the rates were same too, at Rs 1800-1900. Some players were of the view that the prices turned higher not only because of market anticipation of short production, it in fact occurred partly because of before time rumours about the crop.
The picture will clear when the Pakistan Cotton Ginners Association (PCGA) will start issuing its fortnightly report on current figure. Nearly 12000 bales were bought and sold within the overnight price range of Rs4075-4175.
On Saturday prices maintained a firm look on the cotton market as mills were still active after the fresh rain in the Cotton Belt. The official spot rate was unchanged at Rs 4125. Phutti prices in Sindh were unchanged at Rs 1900-1925 and in Punjab at Rs 1800-1900.
According to the market sources fresh rains in the Punjab may hurt the cotton quality and may cause rising trend in the rates of Sindh types. A leading cotton analyst was of the view that till now above 0.8 million bales of cotton have reached ginneries against the last year figure of nearly 0.6, showing plus 0.2 million bales. It seems that the ginners may lower the asking prices to dispose off unsold stock. Some 13000 bales were traded at an improved range of Rs 4075-4200.
TEXTILE EXPORTERS TEMPER:
Are exporters of textile products in a different mood to compensate export loss during past few weeks and months? It visibly looks so beyond comprehension. Because cotton prices are poised to break record after record, but support is showing no respite.
In recent days the cotton consumers temper evident was that meet my cotton demand unmindful of prices. The sellers, too, seemed to have got tired of pushing prices up, as compromise attitude was above board, according to the market sources. The pause has been at regular intervals, and, as the mood of growers appeared was welcome and seemed to meet the entire needs of the millers.
God has always been merciful and beneficial to Pakistan, who ensure that palatial buildings have strong foundation but better not country and economy resultantly people every two to five years pray about its existence. In the prayers are all including those on whose shoulders they take upon themselves to set the wrong right in the way of prosperity. A recent report, in memory serves well, the textile premier organisation declared determination to go with or without government help. The determination speaks too much high of the organisation looking from the recent past days the sector was likely to collapse without seeking something was besides other thing mainly the tax payers money, sources close to business and exports said.
The patronage of local lint, the trend is reaffirming is good, which may ensure more cotton growing sentiment among the growers who have always been discouraged by huge imports.
IMF TEAM IS DUE:
The headlines such as one above hardly gives any positive signal when an insolvent country is the destination. The businesses and exports have not made this country solvent so that in 60 years development of basic need and spared from sustained budget and trade deficit. The ever changing governments could never see where the counties beginning to go along scaled Mount Everest of progress and prosperity leaving this country to be in want of food, power, roads, machinery, dams and reservoirs and fellow feelings.
The textile products were single one sector earning highest forex because few commanding don in the corridors of power in the capital and raw material gifted by the Almighty proved easiest and labour free mint. The authorities taking over the high seat and quickly quitting that perceived there could be other knowledge based sector can float Pakistan on the surface from sufferings.
Like every election aftermath, despite initial large heartiness following polls with every passing usual day old days bickering is causing abnormally heart throb of few alive to see this potential laced country to catch up with fellow travellers.
It makes every Pakistani apprehensive why the IMF team will land here on September 12, 2008 to hold talks on technical aspects with the ministry of finance and State Bank authorities for over one week ie September 23, 2008. The ears had relaxed very lately from pestering sound that Pakistanis wont go with begging bowl anywhere with depressed hearing prayers. This coming and going has no doubt continued but almost for some advice instead of tightening rope of fresh aid and loans.
Just in case, the new rulers turn this country suppliers of textile, sugar, cement, tractor, dyes chemicals and every thing that is imported and drain out small forex earned. The leading businessmen in Karachi take no time in blaming the government it chains the steps get ready to set up textile machinery plants and like things, which has kept this country merely an import house of their exports. No time to get entangles in disputes whether allegation is true or otherwise. Time it to start this country building up.
SAVE COTTON ADVICE:
Advising cotton growers to take care of the crop is indeed necessary but waking up growers alone is enough? Growers give crop from sowing onwards until harvest every thing short of blood. On the healthy growth depend two square meals - with or without butter. As a matter of fact cotton not only serves the growers, but when value-added to it hundreds and thousands are engaged in one or the other way, and above all, its products on exports earn highest forex singly with so much quality linked to it, sources have always went out of the way to preach cotton is given due importance, with or without any other emerging knowledge based sector.
But cotton crop from beginning to end remains dependent on weather - rains, floods, dry spell, wide varieties of pest attack and last but not the least, dearth of most needed drugs. In this report dozens of drugs have been suggested, are not available or at prohibitive price. It is here that agriculture department should be more alert and watch pesticides drugs sales point. The farmers keep vigil all through but not all are solvent to avail drugs at high prices.
The authorities should take measures to induce moneyed people invest in units producing insecticides, pesticides and hosts of other drugs, if this country is to be freed from keeping store house of producer countries. Until then authorities instead of advising the growers to be alert to apply such and such drugs make them available in all sale houses and at reasonable prices. The growers have also suffered enormously at the hands of the customers who make huge imports to keep local cotton under pressure! The 60 years old practice should cease now.
TEXTILE MACHINERY IMPORTS DOWN:
The textile industry is in crisis for the last two years and the main problem is high cost of doing business. The first victim is imports of textile machinery, which was down by 42 percent during the first month of FY09. Sometime back textile sector optimistically would declare having invested, but the result was, as streamed down, gradual decline in exports.
The sources who are close to textile manufacture and exports, have been suggesting that efforts have been approach the authorities so that packages are released to increase exports despite high cost of doing business packages have been forthcoming but exports have gone up has not been reported. The textile exporters, who had been in wait for a fresh package, said to worth Rs 40 billion as propounded by the Ministry of Textiles. The government however obliged the textile exporters with Rs 12 billion subsidy.
The exporters have not immediately reacted, which is expected shortly any day. However, the amount size showed quick import of machinery seems unlikely. However, the money could be utilised in covering the cost and giving an edge over the regional and international competitors. This is perhaps second big amount given to textile sector appearing in dire need of. Will that be by any chance awaken the package seekers to divert the amount to setting up textile machinery, units producing dyes and chemicals and such industries that exists beyond our borders and who produced products of textile and everything that earns them the forex and our suppliers.
The imbalance in world economy for natural calamity or man made ones affect them for a while and soon they gather moment and strength unlike us who beside importing needs to survive call for concessional supplies, loans and aid making the country ever more solvent. How Pakistani scan the headline-lack of refining facility for thick grade. Two million barrels crude exported to china, to do the needful for us.