The week under review ended on November, 8, 2008 had so many turn and twist to upset noting direction, the consolation derived by cotton consumers was expectation of government's various facilities. The ginners were somewhat out of sorts due to expeditious phutti flow hurting stocks already lying with them the spot rate opened at
WORLD SCENARIO:
The futures rose slightly or went down on the NYCE during the week which had been marked by, generally believed as, historic event owing to presidential elections.
However, on Monday the contracts were subjected to moderate gains owing to investors who availed cotton at lows - December showing up 0.39 cent to 44.68 cents a pound. Meanwhile, China was being held in low key what was said to have cancelled 4000 bales of cotton. Analysts too expressed that retail demand was poor. Some were avoiding buying activity to see polls aftermath scenario.
On Tuesday futures received shot in the arm as dollar lost some value just ahead of presidential election results. The dollar episode encouraged commodities buyers. Cotton buyers were longing to lift but were looking for even better market for taking advantage of the fall.
On Wednesday futures closed lower as some cotton investors took their cue from sharp declines in oil and grain. Analyst observed with the US presidential election decided challenges of the slowing US economy to sink in again.
On Thursday three percent loss was marked but key support area held and traders said selling was light and mostly by fund investors tracking declines in other commodities. With slow outlook for retail sector many analysts saw demand for cotton to remain weak.
On Friday, the NY cotton futures ended the week near its latest 3-3/4-year low after breaking below several technical support targets when a dismal reading of the US labour market gave investors little reason to hang onto fiber futures, brokers said. USDA releases its outlook for the 2008/09 cotton crop year at 0830 am EST (1300 GMT) on Monday. The key December cotton futures closed about 2.25 percent lower at 42.07 cents a lb, a 0.91-cent decline.
But the December contract fell as low as 42.0 earlier in the session, matching the August 2004 bottom on the spot cotton contract chart and breaking through several downside targets on the way down.
December cotton volume stood at 14,630 lots by 3:26 pm (2026 GMT). March cotton ended with a loss of 1.09 cent at 45.60 cents a lb, about a 2.50 percent drop.
LOCAL TRADING:
Trading in cotton in Pakistan had its own pattern and was dependent on good production against ICAP report that world will see 2008-09 production down.
On the opening day when nearly 19000 bales changed hands spot rate refused to budge. Phutti prices in Sindh and Punjab stayed put at 1550/1600 per 40 kg. Stand still position was marked both sellers and buyers watching possible entry of Trading Corporation of Pakistan (TCP) , But after a week, since authorities asked the TCP to start buying cotton to restrain sagging prices, it was of the market. However, ginners were acting on their own and maneuvering prices. The opening day was left spot rate unchanged, phutti was also put at previous rate and in cotton sales prices ruled between Rs 3050 and Rs 3150 per maund.
On Tuesday reason known to ginners spot was sharply boosted higher by Rs 75 to Rs 3200, despite report that PCGA had put phutti arrivals were higher at 5.3 million bales against last years 4.2 million bales. However, the rise could be attributed to buying which was equal to Mondays around 20,000 bales. Phutti was modestly higher to be market at RS 1550/1650. The world report sources international farm group had said that global cotton imports will be down by Six percent to 7.8 million tons.
On Wednesday delay in TCP entry into market offered opportunity to cotton buyers at the ruling prices which in all likelihood will jump with TCP lifting. The result was apparent, the buying was more aggressive seen during the earlier two days. Over 20,000 bales changed hands at prices between Rs 3100 and Rs 3250, not likely after two days when TCP start buying in a day or two.
On Thursday cotton buying remained on the higher side despite rates remaining firmer. The entry of TCP any moment had nearly saved growers and ginners from great loss. The most brisk buying at Rs 3100 and Rs 3225 ruling rate was strange.
On Friday buying continued with pace despite firmer price continuing on guess how trading will show after TCP had entered the market. Spot rate was held at Rs 3200 as phutti prices too remained unchanged at Rs 1550/ Rs 1650.
On SaturdayThe following deals were reported: 400 bales of cotton from Khipro at Rs 3100, 1000 bales from Mir Purkas-Sultanabad at Rs 3100-3150, 1200 bales from Shahdadpur at Rs 3125-3150, 1000 bales from Sanghar at Rs 3100-3125, 1200 bales from New Saeedabad at Rs 3100, 1000 bales from Khirpur Rs 3125, 2000 bales from Upper Sindh at Rs 3250, 2000 bales from Shujabad at Rs 3150-3250, 200 bales from Muhammad Pur at Rs 3250, 400 bales from Lodhran at Rs 3190, 400 bales from Liquatpur at Rs 3250, 200 bales from Bhawal Pur at Rs 3250, 200 bales from Fort Abbas at Rs 3250, 400 bales from Jahania at Rs 3150, 200 bales from Jalal Pur at Rs 3190, 200 bales from Dunia Pur at Rs 3150, 400 bales from Chichawatni at Rs 3200, 200 bales from Mian Channu at Rs 3200, 1000 bales from Rahim Yar Khan at Rs 3250, 600 bales from Shadan Lund at Rs 3250-3275, 600 bales from Khanewal at Rs 3200-3250, 200 bales from Kabirwala at Rs 3225, 600 bales from Ahmed Pur at Rs 3250, 800 bales from Rajan Pur at Rs 3250, 400 bales from Dera Ghazi Khan at Rs 3225 and 200 bales from Vahari at Rs 3200, they said.
GROWERS SHOULD ALSO BE IN MIND:
The wind of change seems is being talked, and, this time more serious and with a touch of honesty. No worse than the time economy and exports could be in such doldrums ever. The authorities have shown concern about difficulties ginners have been facing. In fact all sectors have been riding on the same boat and government is keener to facilitate all so that dream of a happy and prosperous life is ensured.
The ginners have voiced to get uninterrupted power supply. The ginners for the last few months are on record to voice their grievances on grounds hitting them hard. The Minister for Water and Power Pervez Ashraf has directed Pepco that ginning factories must be ensured power supply so that lint supply is smooth and cheap so that cotton related exports are expedited as for sometime past they have suffered on many counts primarily utility charges which, though government deny are higher than in rival countries.
The ginners have been considered for some ease, growers particularly the most hard up ones should be taken care of. Crop insurance is one right step which is being talked, besides other facilities particularly in Punjab are very consoling for them.
Had agriculture and manpower was taken care of right from the beginning of a journey country started, once broken beggars ball had not been picked to be in use. The poor are right at the front to get hurt and growers and ginners are the communities very few have enjoyed the country had showered on them. The way Pakistanis see in staking freedom and sovereignty show the economy or exports and prosperity all seem to stay far off from the nation cherishes!
CHANGES FOR MORE COTTON CULTIVATION:
With the hiss in the air that Trading Corporation of Pakistan was asked by authorities to start procuring cotton from the market where the smooth phutti flow had dragged prices just to nearly half, the prices started showing up. According to market sources the rising trend in bound to encourage growers to go for more than 3.20 million hectares during2009/2010.
However, currently, at regular interval ginners threat on one or the other grounds to shut ginneries should be cause of worry to cotton consumers. The ginners have claimed nearly four million bales of cotton and hope to receive cotton seed in large quantity. The cotton production is expected to hit twice repeated target at 14.11 million bales. Despite expectation that bumper crop was around, the spot rate as well as prices are fluctuating mostly downside sizably.
The textile exporters are genuinely distressed particularly hoping huge order cut. The American report say consumers are effecting cut in spending. What would be ground reality on X max eve is every body's guess. The widely trumpeted global recession of worse type by December is also anybody's guess but scenario change to just reverse cannot be expected. Keeping all the world scenario in view what cannot only be apprehended but abhorred how equipped Pakistanis are who fail when opportunity comes dancing before them, as they are caught unawares!
HOW EXPORTS SERVE ECONOMY, COUNTRY?
Exports in this country significantly attract and heads when scramble for demands for needs and more for competition abound the envious. Mention also is necessary that certain sectors contribute significantly without receiving government help.
Had demands not been for more imports to supplement exportable products heart burning was probably not as much as it is today. Useless somewhat also for the sake of learning why exports despite several potential sectors have never proved supportive to economy and country. Once again country is on the brink of defaulting and stretching hand bearing begging bowl. Has God not been merciful to us to this extent to import food items and cotton. The pages of news papers are witness, sugar cotton, wheat and rice was subject to bulk imports when all had agreed and announced country had bumper crop. The rulers and those who matter in running the country if devoted 1/10th of the time they waste on flying across various borders with request for money much lower than Pakistanis have in foreign banks.
The apparel exporters have as a last resort approached in writing to the State Bank of Pakistan for export finance up to 100 percent without which substantial forex earners feel had rendered them un-competitive in international markets. Going into details will be waste of space, suffice possible to refer to con continual demands by exporters showing inability to contribute hugely by exporting without outside - government or banks help. The condition the country and economy is passing through such expression seems generally embarrassing for authorities. Still if any room is there, apparel manufacturers and exporters should be encouraged. Undoubtedly they are the ones who earn highest per unit in comparison to any other.
ROZs COMMITTEE'S MEETS:
The projects or issues are when out of mind or start slipping out of mind a report enlivens hope, project such as ROZs is very much alive. Last time months back, before friends of Pakistan met to signal disappointment US Senate and Congress were about to decide positively on this issue. The American decision is perhaps still awaited as the meeting mentions American aid in this connection anywhere. Is ROZs that was discussed in the meeting Pakistan's own perception and plan to create much desired activity in frontier province and Fata (Federally Administrated Tribal Areas) to engage men roaming without a job in hand.
Whatever may be the case if the country is to be kept intact, certain basic comfort such as job is a must. Crying merely about shortfall in exports and collection of income tax is unsubstantial without large network of opportunities where they are needed most exist Pakistan is certainly stronger today for govt today is running on consensus. The bond, however, seems to be not without suspicion and crude estimate. The country needs more jobs, more education, more labour trading institute and certainly not exports of manpower to be exploited by employers. God given potential should be taken care of rather than sold at throw away prices.
The institute and the training should be made universal so that they contribute to national economy and prosperity in the absence of which young raw hands are exported for few cents which buyers, export after adding value at 10/20 dollars. It is high time with or without foreign help ROZs network are established in all nooks and corners of this country. This is how poor could be made to stand on their food and certainly not by taking tall about their welfare.
IMF LOAN NOT NEEDED, IF....
If only our textile products would have been earning, as per its potential, the need necessitated today to look for loans around at draconian terms. Those who reach the dragon terms size shudder to even think but Pakistan is a country so full of potential that it has survived the worst terms ever. The Pakistanis are quite shrewd people who need foreign loans, while their own earning serve foreign banks and economy. how under the circumstance foreign investors are allured to invest in this country which has infrastructure same with which cooking since 1947.
Only recently nation was, without a touch of satisfaction, told begging bowl has been broken. And with much talked and celebrated so called democracy, as much fresh loans are being talked with as much frequency and without touch of horror. The IMF was enriching this country very lately with precious advice, is again in focus, very much, but at a time and convenience of Pak authorities.
Some closely related to this country is Europe had spoken with clarity that IMF loan will not come in six months, six weeks but six days. The loans are however, yet a mile away.
The question is whether loans and yet another loans will spare Pakistanis ever. The income tax payers tax is deducted at source. Can anybody say with certainty whether there is any relevance between Pak population and Pakistan taxpayers. All-round improvement is required to fashion future economy and prosperity, and, in this the already rich should have greater share, or else the democracy and parties have no magic to do the good being talked for six decades.