Favourable terms granted possibly by the first-ever five-year textile policy- cotton buying sustained during pre- and post-Eid holidays. Rates in ready were higher somewhat so was the case in Punjab plants spot rate after retaining for five days at the last week's level was closed at Rs 3500.
INTERNATIONAL SCENE:
Considerable development will depend on positive or otherwise outcome of G-20 likely to furnish direction, from exposure of near true condition of true global recession. Besides this, outside market had to play important role in keeping cotton weak. Dollar is not keeping steady these days affecting cotton market in its own way.
The opening market session was weak to prompt short-term investors in order to gain profits. The market however, could not ignore that cotton had been on the rising spree since a fortnight a correction had to follow. The weather in main US cotton growing region, which according to the weather pundits was to remain dry.
Earlier wet weather forecast had spurred speculative buying, helping the surge of futures and cotton prices abroad. Cotton market operators realised that they had to live with the rise and fall in the dollar and currencies, which is working as weakening cotton or boosting cotton value. The players are anxiously in wait for contribution of September-October, the months, help grow cotton and boost production. But much is looked to favourable outcome of G-20 effects on cotton trading and cotton value in coming days.
On Thursday the NY cotton futures closed firmer on modest speculative buying, as investors continued to increase their long position in an already overbought market, brokers said.
The December cotton contract went up 0.13 cent to finish at 64.81 cents per lb, moving between 63.32 and 64.88 cents. Volume reached 6,511 lots at 2:33 pm EDT (1833 GMT). March cotton rose 0.04 cent to end at 66.63 cents, dealing from 65.60 to 66.67 cents.
On Friday the NY cotton futures closed sharply lower on investor liquidation and profit taking, as players opted to take cash off the table after the market had rallied steadily the past few sessions.
The December cotton contract sank 2.87 cents to finish at 61.94 cents per lb, moving between 61.91 and 65.39 cents. December contract volume reached 16,664 lots at 2:59 pm EDT (1859 GMT). March cotton fell 2.69 cents to end at 63.94 cents, dealing from 63.90 to 67.28 cents.
LOCAL TRADING:
In the post Eid holidays, cotton market sustained activity as 10,000 bales changed hand in price range of Rs 3500 and Rs 3575 per maund. The official spot rate was unchanged at Rs 3475. Phutti in Sindh stayed put at Rs 1700 and Rs 1725, while in Punjab rates were shown higher at Rs 1725 and Rs 1800.
On Friday the official spot rate was unchanged at Rs 3475.The prices touched the new high at Rs 3610,as a result of strong mills' demand. Approximately, 23,000 bales changed hands between Rs 3500-3610. Phutti prices in Sindh were same at Rs 1700-1725 and in Punjab, the rates went up to Rs 1725-1800.
Market sources were of the opinion that steady trend was again witnessed because mills were still busy in hectic buying of cotton amid rising fears of short supply in the coming days after the conflicting reports about actual extent of damage to the crop.
On Saturday the official spot rate was increased by Rs 25 to Rs 3500. Mills showed no reluctance in making new deals on fears of short crop. Approximately, 22,000 bales changed hands between Rs 3485-3600. Phutti prices in Sindh were same at Rs 1700-1725 and in Punjab, the rates went up at Rs 1725-1800.
Market sources said that phutti arrivals from Sindh is satisfactory and due to best quality, the ginners are fetching good profits. In Punjab, the supply is low and the situation will emerge after October 15, report about the damage to production due to pest attack.
TIT-FOR-TAT REACTION:
Unless the world learns to live in peace so-called recession - worst than recession and great depression 1930s will emerge to punish. The 9/11 incident, war in Afghanistan and Iraq cannot keep secure even the highly developed countries. During Second World War Japan was penetrating in shape of trade and exports endangering others who aspired to be the leaders.
Today the delay in Doha Round, which has completed eight good years of life without making any advance is obviously not everybody concern. China producing cheap goods and taking over markets everywhere on earth, is on the watch by many countries. The latest trade measures, of the type imposed on Chinese tyres by the US is full of risk, mainly because of recession in effect.
The trade dispute blew up as Washington imposed additional duties on Chinese tyres, accusing Beijing of flooding the US market. The Dy. Director General WTO said while making the move light saying safeguard measures of the type applied by the US were not protectionist, but were still damaging to free trade. People reverting increasingly to those remedies is a source of concern to the WTO, as they all result in restricting trade and there is a serious risk of spillover and tit-for-tat reaction, which will undoubtedly slow down any recovery.
The WTO official hoped G-20 leaders meeting in Pittsburgh next week would commit to wrapping up negotiations on the long running Doha round of world trade talks by next year and agree to resist protectionist pressures.
COTTON IMPORTS ARE NORMAL:
A report recently appeared saying the Pakistan government will import nearly 3.5 million bales of cotton due to failure to achieve target around 13.36 million bales. The increased areas fixed this season by 0.7 to 0.8 million acres had infected hope that more production will be ensured. But due to multiple pest attacks like Jessie, nealy bug, army worm and curl cotton leave virsu (CLCV) plus heavy rains in August have led to reduced estimates around 0.3 to 0.4 million acres of cotton has been badly damaged.
The report has simply been silent whether struggle to fight attacks was made or somehow allowed to be attacked and damage. In the past few months agri dept would release advise to farmer to take precautionary steps so that cotton crop is saved from damage. The knowledgeable circles through columns advise which is not enough, agri experts should do more by way of helping poor farmers to allow plants in this field to grow in health.
Now report is in press about damage, which possibly could not be adequately fought, it appears, what, however, is a matter of regret that relaxation will have Pak government billions of rupees. Can Pakistan under the ill economy health waste billions whereas little bit of efforts could have been saved.
No doubt the imported cotton would serve textile and allied industries.
Sindh cotton crop has been reported safe for farmers had sown here in early March and April. Beside all these hullabaloo, annual imports take away bulk of our export earnings, which this country cannot afford to. The authorities pay little heed to the fact that country stands fourth in growing standard cotton, still on one or the other ground imports are allowed by the government, which if given a healthy look cannot be needed at all.