Cotton market trading was seen just four days owing to holidays. During the week ended on December 10, 2011 official spot rate stayed firm at Rs 5,300 prices in ready remained range bound, volume increased to 40,000 bales in a day.
WORLD SCENARIO
Some analysts wondered the global markets continued to consolidate more so relating to cotton. The USDA report said that the crop was battered by rains in Mississippi and in Texas the harvest was lost due to drought. The USDA now plans to reduce estimates of both production and exports. China has barred buying until April next. In Pakistan latest arrival showed production around 11.01 million bales. India is likely to produce 43.10 lakh bales (170-kg). Australia and Brazil both are in a position to export to needy countries.
On Monday the NY cotton futures settled marginally higher in thin trade, as the market awaited Friday's release of a government crop report. Key March cotton futures gained 0.38 cent to finish at 92.22 cents per lb, moving from 91.54 to 92.80 cents. That was not too far from the Friday band of 90.92 to 92.27 cents. Volume traded on Monday stood at around 7,700 lots, nearly two-thirds below the 30-day average, according to ICE Futures data.
On Tuesday, the NY cotton futures settled higher on thin investor short-covering, as the market tested the upper end of its trading band, while looking toward release of a government crop report on Friday. Key March cotton futures gained 1.59 cents, or 1.7 percent, to finish at 93.81 cents per lb, moving from 91.51 to 93.63 cents. Volume traded on Tuesday stood at around 11,300 lots, more than 50 percent under the 30-day average, according to ICE Futures data.
On Wednesday cotton futures settled lower on light investor sales, after renewed worries over the euro zone debt crisis and the market's inability to race past topside resistance. Key March cotton futures dropped 1.50 cents or 1.6 percent to finish at 92.31 cents per lb, after trading between 91.75 and 93.80 cents. The range was very close to the Tuesday trading band of 91.51 to 93.63 cents. Volume traded on Wednesday stood at around 8,400 lots, some two-thirds under the 30-day average, according to ICE Futures data.
On Thursday the US cotton futures settled slightly easier on thin investor sales as players eyed an EU summit on Friday to tackle the bloc's debt crisis and awaited release of a government crop report tomorrow. Cotton was pressured by weak financial markets, as investors were dismayed by the European Central Bank's lukewarm support for aggressive action to resolve the crisis. Key March cotton futures slipped 0.26 cent to end at 92.05 cents per lb, moving from 91.66 to 92.99 cents. On Wednesday the trading band stood at 91.75 to 93.80 cents. Volume traded on Thursday stood at around 6,600 lots, over two-thirds under the 30-day average, according to ICE Futures data.
On Friday the NY cotton futures lost nearly two percent of their value, hit by a bearish government crop report that pointed to a weakening trend in global fibre demand. The US Agriculture Department (USDA) forecast US 2011/12 cotton exports at 11.3 million (480-lb bales), unchanged from its November estimate. US 2011/12 cotton production fell to 15.83 million bales compared with 16.3 million in its November supply data. Key March cotton futures tumbled 1.62 cents or 1.8 percent to finish at 90.43 cents per lb, after dealing between 90.15 and 92.75 cents.
LOCAL MARKET
Cotton market last week saw sluggish goings, as leading buyers were on the sidelines to have a grip on the situation during post holidays.
The opening day ie Wednesday spot rate was unchanged at Rs 5300, seed cotton in Sindh ruled at Rs 1800 and Rs 2300 and in Punjab marked at Rs 2000 and Rs 2500. In sort of holiday mood where sellers were hand-tight in offering only 2000 bales of cotton changed hands in prices quoted at Rs 4900 and Rs 5300. The market operators pointed out reservations mainly on the part of sellers who are worried over falling cotton rate globally.
On Thursday cotton exporters were engaged in buying process which together with millers lifted 20,000 bales in price range of Rs 3850 and Rs 5350. Market sources when asked exporters were trying perhaps to replace the TCP ginners are insisting to induct.
On Friday trading activity showed betterment so the prices managed to maintain firmness but it may prove short-lived due to fall in foreign demand. KCA official spot rate was unchanged at Rs 5,300. Prices of seedcotton in Sindh were unchanged at Rs 1800-2300 and in Punjab rates were at Rs 2000-2500. In ready dealings over 23,000 bales of cotton changed hands at Rs 3,800-5,400.
On Saturday strong demand by mills and foreign buyers aided the rates to stabilise. KCA official spot rate was unchanged at Rs 5,300. Prices of seedcotton in Sindh were unchanged at Rs 1800-2300 and in Punjab rates were at Rs 2000-2500. In ready dealings approximately 40,000 bales of cotton changed hands at Rs 3,800-5,400.
MINISTRY CONDEMNED FOR IGNORING TMA
How anxiously textile sectors had awaited for nearly decades to have a ministry like textile ministries working perhaps without any lousy decision in neighbouring India and Bangladesh. When it came supposedly to help sectors in bettering the exports and economy exports rose to encouraging level, only once, when the minister set the ministry's ball rolling by firmly deciding cotton yarn will be so managed that the sectors depending on yarn will not be deprived.
The result was shower of praise from all quarters. The government however, had different plan a change of set-up, which had just started moving. The TMA contributes more or less dollar one billion and deserved attention along with stakeholders who were engaged in revamping the sector, which was most productive. But towel manufacturers were pained to voice for being ignored in the meeting where all the stakeholders of textile association were present.
The meeting had to review textile performance for July/October 2011-2012, briefing on textile policy initiative and disbursements plus discussion on burning topic of MFN status to India. The TMA chief Feroze Alam Lari reacting strongly on this lapse of ministry. Besides, he also lamented that another meeting of NA standing committee on Port and Shipping scheduled on December 8, be postponed and agenda be circulated to enable TMA to contribute before the law is finalised.
The sources who had the knowledge hoped and prayed the issue raised by the TMA will be addressed at the earliest - as correcting lapses at the earliest may yield result in the shape of increased exports.
COTTON PRODUCTION UP, WHO TO CELEBRATE?
The rise in cotton production is good for the country and happy news, as rains had left trailing behind many were forced to gesture. Will happy news be coming without fear of contradiction or sector interest gives this lovely shape rigmarole? Any way much will depend how authorities ride over varying interests.
God gifted bumper crop should be considered a boon - but in this minus ethics domain turns out to be a bane. The growers, ginners and different consumers keep eyes over how to extract most. The ginners hard labour findings over vast tract of fertile land are not necessarily the same that of cotton committees.
Even today heart burning is evident, how to cool down the same is difficult, when cotton is over and above needs sellers remain under pressure, while buyers have their own irksome moment. Buyers keep eyes on edge attached to products soon to be exported.
The exporters of textile products need to be watched whether they are at ease or competition is tough. This is very paying from economy and country's point of view. The textile ministry do exists, so it has tortuous job to ensure cost of doing business is low and on exports have edge over rivals, sources close to textile business stressed.
EVER APPREHENSIVE TEXTILE INDUSTRY
Every passing moment declining mercury is panicking the textile industry, this is what industry leaders say wearing apprehensive look all around. This is potential month with potential business prospect as X-mas is only weeks away. It was five days gas supply, which leaders say has been slashed to four days in a week. And they whisper what moment awaits them ahead is known to God only.
On going gas curtailment has made over 40 percent of the capacity over 40 percent of the capacity redundant in Punjab, circles claimed. They claimed the industry had contributed record $ 14 billion export last year. What is going to happen after a week or so they were afraid to speak. Power supply will be subdued due to canal closure during desalting campaign.
The industry leaders apprehended increase in Non Performing Loans (NPLs) due to industry is running below capacity for above stated reasons. The situation is grim is known to all and sundry, but will to serve the industry help production of export goods. The X'mas orders are lurking ahead. Now authorities are in the best position to reap good harvest if they so will!
GROWER, GINNERS FACE SURVIVAL ISSUE
The ginners of late, seem to have been faced with problem could only be solved by authorities, and convinced, simultaneously that the same was not forth-coming. The pronouncements made in the report gives vent that ginners have in mind all options including casting vote against the present regime. In this write up for years the rogue has been reported but the nagging of various textile sectors continued to linger on. The sentiment expressed here has touched extreme point.
The report begins with these words: The Pakistan Cotton Ginners Association (PCGA) has appealed State Bank of Pakistan (SBP) to issue seasonal cotton advances and cash finance for the survival of ginning industry. The cause of this is that growers and ginners unless aided financially face survival issue. For a couple of weeks ginners have been expressing what used to be in undertone. The annual election introduced new leaders but the tone and tension are different and much more focal.
Since three names have been indicated: Current Chairman and former office bearers whose thunder is more apparent is difficult to distinguish.
However, they strongly reacted to APTMA pressure on the government regarding opposing the procurement of cotton on support price through TCP. Report spoke hotly against such elements particularly brokers and "beoparis" who are playing key role in pushing the cotton sector towards nowhere. All those who are seen, as allegedly wrong doers have pointed out in the report making the work of authorities easy to sort out difficulties and remove them. In mind should, however be that interest of economy and country should be upper most.