The replete cotton sellers/buyer faced had not settled until the last day and for a moment it seemed sales and prices had been determining their ways and value in darkness. However, the spot rate was sustained for some days at Rs 3350, which ultimately settled at Rs3400, while sales in ready moved between Rs 3250 and Rs 3490.
Phutti rates were nearly unchanged remaining stuck up at Rs 1650/Rs 1800 in Sindh and Punjab.
WORLD SCENARIO: Investors short covering one day and sale the other day had affected futures to fluctuate beside outside market trading in grains too affected change. The March on the opening day gathered 0.30 cent to 49.71 cents. While May edged up by 0.36 cent to 50.80 cents a pound, while the proceedings on the day was impacted by investors short covering and values of corn and grains influenced futures farmers. Analysts observed that fibre contracts would need to hold the 49 cents level in order to build momentum for a renewed probe of topside targets at 54 and 55 cents basis March.
On Tuesday scenario change was marked as futures settled easier on investors sales and analysts said the market ability to hold an area of support should encourage fibre contracts to consolidate at these levels. Others said the market apparently had once again held a critical technical level. The traders said there was no fundamental news to account for the sell-off in cotton. They saw weaker tone of grains futures in Chicago could also have pressured the market. The vital point traders took note was the reopening of Chinese markets after the New Year holidays in Asia.
On Wednesday futures rebounded and settled higher owing to markets ability to hold an area of support encouraged late short-covering in fibre contracts. Meanwhile market wait for weekly export sales and monthly supply demand reports. The traders buying support helped 49 cents prompting some players to cover their positions.
On Thursday futures turned mixed in switch trade. The weekly export sales were put at 98,200 RBs (500 lbs) from 117,100 RBs, market considerably lower. The shipments hit 205,800 RBs against previous week's 138,400 RBs. Analysts said the market was looking for next Tuesday's supply/demand report.
On Friday expected firmer condition was marked as investor buying likely tied to options expiration of March contract while the trade awaited release of cotton planting report. However, most of the trade expect modest changes in the USDA's estimate of world cotton supply and demand. In either case players hoping production cut besides fall in demand but prices to remain 50 cents and above basis march.
LOCAL TRADING:
Modest trading activity on the cotton market continued despite expectation of TCP to further stabilise prices. The RCC stopped further processes without going into the complaints against non-existence of dirt free cotton. If the efforts to create a culture of contamination free other stopped at such high level as the ECC, there is perhaps no one to bring back over one billion dollars the foreign Pakistan's buyers are refusing on the fake grounds.
For as many years cotton and cotton products are being exported the share of contaminated cotton being stopped by Pakistan will be established for ever. However, the spot rate for some days stayed at Rs 3,350 while phutti prices in Sindh and Punjab stayed at Rs 1,650 / 1,800 and in ready prices ruled between Rs 3,250 and Rs 3,450 per maund.
On Tuesday active mill buying was witnessed pushing prices higher. Spot rate stayed put. In ready off-take prices surged by Rs 50. And as usual rising stance also led to buying activity, which took to over 15,000 bails sold at ruling levels. The availability of quality cotton, which millers aspire most, according to market sources was gradually being held back by the ginners. The TCP tender and its ever returning to tame market has been pushed to the background.
On Wednesday financial crisis kept buyers away from market resultantly only a couple of lots were lifted on the day, ahead Kashmir Day holiday. The spot rate was stuck up at Rs 3,350, phutti stayed put at Rs 1,650/1,800 in both Punjab and Sindh. However, asking prices came below spot rate at Rs 3,300. However, buyers absence from market was seen by operators as a wait to PCGA report and cotton how it behaved after that.
On Friday market turned firmer owing to short crop and lack of quality cotton availability resulted in firmness on the cotton market. The spot rate was same. Phutti prices remained unchanged while jump was evident in prices to Rs 3,475. Over 12,000 bales changed hands showing considerable improvement of the last trading day. On Saturday upwards trend continues boosting spot rate that settled at Rs3,400 and prices in ready business rising as high as Rs3,490. Market players think the ginners would exploit the situation in their favour and raise the asking prices. Over 10,000 bales changed hands.
CONTAMINATION FREE COTTON:
The ECC should have probed the fact or should have crossed people opposing stay of TCP in the cotton market and buying limited number of bales as to why the corp should be dragged out? The ground so immaculately prepared claiming contamination free lint is not available in the country should have been inquired why so. All the players know efforts have always been in this country wishing good for the economy because induction of contamination free cotton has been closed to the heart of authorities.
The cotton buyers from abroad take advantage of Pak cotton being contaminated. Thus Pakistan government has lost over 60 billion dollars on supposed contamination. God has gifted this country with fine cotton lint is supplied with dirt and filth to get cotton at cheaper prices. The ginners who were keen to install machinery to produce as clean cotton as possible at added cost were thwarted to do so. Do nobody in the government is aware of the efforts to sale assuming by today over one billion dollars annually?
Are they not aware of efforts made last by Razak Dawood in this direction and had fixed some ginners in Punjab and some in Sindh on agreed terms to produce as dirt free cotton as possible, but that was perhaps limited to buying by the TCP at a price the ginners had accepted. The spinners and millers as stated by ginners refused added cost. This should be probed whether practice had given a resume if yes, when it and how it was stopped?
In any case sources argued leaving more than one billion dollars annually like that is abhorring. Once again the question has been raised and needs to restart induction of contamination free cotton in this country. Once a culture is created playing with exports and economy will cease. Besides, this step to produce and supply clean cotton, even if some interest resist, authorities must see reason in strictly resuming contamination free cotton supplies.
Textile exporters, according to sources should show also how many dyes and chemicals units are running and saving billions of dollars as they frequently mention how much facilities rivals in China and India get from government. They never see the gains rival textile exporters gain from establishing textile manufacturing machinery, the rivals not only supply indigenous needs but exports including to Pakistan.
GROWERS NEED MORE CARE:
The cotton growers are faced with varied odds, before they harvest and carry up to ginneries to realise their return of investment and hard labour. These problems are not restricted to cotton growers alone, but growers of wheat, sugarcane etc all are bedecked with the authorities are supposed to know their problem at different stages of production. They need healthy seeds, other inputs, water, some need comparatively less but do they must, fertiliser besides being knowledgeable how to and when to and how much to use to give strength to plants to give good and quality yield.
The authorities at the helm of affairs are supposed to know their job well-instead of being poked by relevant secretaries, the practice seems, according to sources prevalent. The time has come digging out one and the other problem and extending to making global issue, worst after 1930s.
The much expected positive outcome of World Economic Forum (WEF) has caved in many head reeling in so called third world countries. Such a signal was not entirely unexpected. Only vary lately G.20 too had to hurl disappointment on the faces of poor. In Pakistan authorities should be wary of any hope from anyone in the world. Authorities here should stand gained worse yet to come. Agriculture, on which is based Pak exports such as cotton, rice, wheat and sugarcane (sugar) has to be the jealously produced so that under no circumstances imports (or exports) are manipulated by unscrupulous moneyed men.
The authorities must right now think how water will be available when time comes, urea and fertiliser is made available when needed and certainly not keep availability to unscrupulous exploiters. The lint trading has been left to, as sources said people who are not necessarily people friendly. There is nothing such as people friendly in the face of money.
The sugar prices are also keeping high despite fact that crushing is on. The wheat condition is not any better. All will depend on good machinery to keep availability tamed and prices reachable by common man.
NOTHING IN GOVT KITTY:
First time in country's history, exporters have been so pronouncedly told to wait and in the meantime consolidate their gains. The PM's Advisor on Finance, a noted banker, mending one leak after another and still not satisfied urged the businessmen to look at the next year while consolidating them during the current year. He said the government has nothing in its kitty for continuity of Research and Development (R&D) fund in current fiscal, making clear to the apparel sector that government had nothing in its kitty for continuity of 6pc R&D fund. However he held out assurance that clearance stuck up R&D funds during June 25/30 is notified and claims would be met accordingly for that particular period. He seems to be convinced about the exporters worries causing high cost of doing business.
Nevertheless, the advisor should have been aware that with exception of God gifted cotton (that too subject to one to four million bales imports every year) the rest of textile exporters needs drain out billions and billions of dollar clean annually adding to high cost of doing business.
Unfortunately the oft-repeated rivals, who take away the edge, gradually and successfully have made themselves self-sufficient in every thing. Their millers need for exports independent of imports is as huge quantity Pakistani exporters take delight in importing be it textile machinery, chemicals and dyes. In fact rivals exporters countries are exporting to Pakistan for textile exporters. No wonder, the sources said, Pakistan has for 60 years suffered from chronic disease the world calls trade deficit.