Lnit prices lost nearly Rs 400 per maund (37.32 Kgs) this week in the ready market following increased arrivals, improving quality, fall in values of New York cotton futures and abundant crop prospects and carryovers in most parts of the world. With the monsoon season approaching its tail-end in Pakistan and scope of better quality and increased arrivals during the coming weeks, bearish sentiment appeared to overtake the cotton market.
Many domestic textile mills are also reported to be faring better with cheaper cotton. Thus cotton prices are weak as several global commodity values also dropped at midweek and economic fundamentals cascaded downwards in most parts of the world. Besides some rain - drenched cotton still in stock with the ginners, it is mostly hoped that grades and other fibre characteristics of Pakistan cotton should improve within the next few weeks.
Generally speaking, it is expected that Pakistan would produce anywhere from 14 to 15 million bales of cotton of domestic size on an ex-gin basis this season (August 2012-July 2013) from which the mills may consume from 14 to 14.5 million bales. Exporters may ship from half to one million bales, while the domestic mills may import between one and 1.50 million bales.
It is hoped that with the ending of the monsoon season, domestic mills will increase their purchases as the current lint prices meet their parity with yarn prices. Thus volume revival of cotton sales should strengthen and profits would likewise improve on yarn business. Cotton exporters are also showing a modicum of interest in their purchases.
Seedcotton (Kapas/Phutti) prices in both Sindh and Punjab were said to have ranged from Rs 1800 to Rs 2300 per 40 Kgs on Thursday. Lint prices in Sindh were said to have ranged from Rs 5,000 to Rs 5,200 per maund according to the quality, while in the Punjab they reportedly ranged from Rs 4,900 to Rs 5,200 per maund in a weak market. Sales of 1,000 bales of raw cotton from Mirpurkhas in Sindh were reported on Thursday at Rs 5,000 to Rs 5,150 per maund (37.32 Kgs), 1,000 bales each from Sanghar, Kotri and 2000 bales from Shahdadpur at Rs 5,200 per maund and 2000 bales from Tando Adam from Rs 5,200 to Rs 5,250 per maund. Sales from Punjab were not available till the evening.
Results have been announced by the All Pakistan Textile Mills Association (APTMA) regarding the election of their new office bearers for the year 2012-13. Ahsan Bashir is the new Chairman of APTMA while the three new Vice Chairmen are Wisal Ahmed Monnoo (Punjab), Asif Inam (Sindh - Balochistan) and Mohammad Taimoor Shah (Kyber - Pukhtunkhwa). Members of the Executive Committee from Punjab region are Muhammad Ismail Khurram, Khawaja Asem Khurshid, Atta Shafi Tanvir Sheikh, Muhammad Asif, Syed Ali Ahsan, Syed Omer Shah, Shahzad Ahmad Sheikh, Aamir Fayyaz Sheikh, Shahid Mazhar and Imran Aslam. Those from Sindh-Balochistan Region are Afzal Umer, Tariq Saud, Ziad Bashir, Khurram Inam, Saleem Shakoor, Naveed Ahmed, Junaid Haji Latif, Muhammad Yasin Siddiq and Nadeem Maqbool. Members of the Executive Committee from Khyber-Pakhtunkhwa Region are Raza Kuli Khattak and Mohammad Taimoor Shah. For the reserved seat for Women Entrepreneur is Azra Akbar, while Mohsin Aziz will be an ex-officio member.
On the global economic and financial front, equity investors got unnerved over the stalemate regarding any credible plan by the Eurozone leaders to rescue economies like Greece and Spain from the socio-economic mess which has actually reached an explosive situation. Furthermore, the fast approaching "fiscal cliff" in the United States of America is barely three months away from now (31st December, 2012) whereafter across-the-board tax cuts and spending increases by the federal government will stand withdrawn. A vast sector of the American economy remains in a no man's land because it is only after the presidential elections are over that any credible steps towards remedying a faltering economy can be taken.
With the Eurozone being at the epicenter of a global economic turmoil and the fate of the world's largest economy, the United States, remaining in a period of critical suspence, the whole world's economic future is rattling nervously. Added to these massive economic headaches, the steady but sure decrease of Chinese performance, the falling economic fortunes of India, the sharp fall in Brazil's trade surplus in August compared to the previous year due to a gloomy world economy, are definite indicators of a sure and present danger of a run down of the global economy.
More specifically, the fears of the genie of inflation lurk large if the plan of Mario Dragi, president of the European Central Bank, is followed to rescue the European economy by pumping an abundance of money in to the various economies. The European Union talks to rescue Spain from its perennial economic pain by providing another bailout runs counter to the philosophy of the German Bundesbank, and the lack of a clear philosophy regarding how to tackle the further integration of the Eurozone, remain fundamental problems of discontent with in the single currency union.
Moreover, the struggling economy of France has already rendered three million workers jobless. The serious riots in Greece and Spain where the discontented workers are burning public property, creating barricades and throwing Molotov cocktails on the constabulary are potent signals that the working class there are deeply concerned and cornered due to economic failure. They are protesting against the Dollars 39 billions impending cuts scheduled by the government in public spending and also the increase in taxes. Equity values plunged four percent in Spain last Wednesday following the mass public protests against the government.
Full blown and widespread protests were reported in Greece on Wednesday (26 September, 2012) which reportedly made the equity markets to shudder with fear. It may be concluded by recalling that more than twenty meetings of top European leaders and officials have taken place over the past three years, but these meetings have failed to solve the single currency crisis in the Eurozone, besides having failed to provide any other scheme or proposal of a unified, plausible or practical solution to the bankrupt global banking problem while tensions continue to rise globally due to a recession coupled with crippling austerity measures which continue to bite cruelly.