Cotton lifting in the ready market was at the best moderate as a few exporters, besides some mills here and there, lifted small quantities of cotton. Thus small time business was being reported from the cotton market on a day to day basis where the ginners are still said to hold an unsold stock of about 550,000 bales (155 Kgs) from the current crop (August 2013 / July 2014).
Due to rains and cold weather, less sowing of early crop cotton was being reported from Sindh for the new season (2014 / 2015). Due to uncertain weather and late reaping of the wheat crop, there are barely any signs of early variety sowing even in Punjab. In view of the continuing dull condition of the domestic cotton market, the Karachi Cotton Association (KCA) cut the ex-gin price of grade three cotton by Rs 50 per maund (37.32 Kgs) on Thursday and fixed at Rs 6,500 per maund.
Due to very slow sale of cotton yarns a couple of dozen spinning mills are reportedly said to have partially - a few of them fully - to have closed down. As a consequence, the lifting of cotton must perforce slow down even if unsold stocks are said to be barely half a million or slightly more bales still lying with the ginners. In recent days, cotton prices from Sindh are said to have fallen by Rs 100 to Rs 200 per maund (37.32 Kgs) in the ready market. Thus the general price idea of lint from Sindh was said to have ranged from Rs 5,300 to Rs 6,200 per maund (37.32 Kgs) on Thursday while in the Punjab the prices reportedly ranged from Rs 6,000 to Rs 6,500 per maund, according to the quality.
Over the past several months, the Pakistani textile industry, more so the spinning component is facing very difficult times. In this regard, recently the Chairman of the All Pakistan Textile Mills Association (APTMA) Punjab zone, S.M. Tanveer has presented a sustainability and growth vision (2018) to the Punjab Chief Minister, Shahbaz Sharif. Compared to other provinces, Tanveer said that Punjab textile industry was being deprived of both gas and power supplies which is making it unviable.
According to APTMA leader Gohar Ejaz, heavy investment is needed to produce 750,000 tons of surplus yarn to feed the value-added textile sector which could add another $13 billions to the exports within five years. In the meantime, Federal Minister for Textiles Abbas Khan Afridi told the Pakistan Textile Exporters Association (PTEA) in Faisalabad recently that the government would extend full support and assistance for strengthening the textile sector. Earlier, PTEA Chairman Sheikh Ilyas Mahmood welcomed the minister.
In ready cotton sales, 200 bales of lower quality cotton from Khanewal in Punjab reportedly sold at Rs 5,400 per maund (37.32 Kgs), while 300 bales from Depalpur are said to have been sold at Rs 6,500 per maund. On the global economic and financial front, equity prices started the week on a higher note but later in the week European scrip and also shares values on some other markets started slipping. There were several negative factors which created a modicum of apprehension amongst the investors who saw some uncertainties which may impinge on the highly elevated equity prices which could topple the share values in course of time.
First of all, reports from Beijing indicated that Chinese exports and imports fell sharply in March 2014 which foretold in no uncertain terms that the world's second largest economy is heading towards a slow down. The reports added that Chinese exports fell by 6.6 percent in March 2014, as compared to the previous year. More worrisome was the data pointing to a decline in imports by 11.3 percent in March 2014 when compared with the same time during the previous year.
Analysts have interpreted that decline in both export and import trade in China signifies clear weakness in its economy which is marred by poor data in both manufacturing and the retail sectors. Shares prices on the Tokyo market fell 2.10 percent on Wednesday due to a stronger yen following lost hopes that Bank of Japan would provide further boost to its stimulus programme. Moreover, shares of Toyota Motors come tumbling down when it announced that it would recall a whopping 6.39 vehicles from all over the world due to various problems.
It was reported from London that Britain's exports of goods fell sharply in February 2014 which is the lowest level for its exports in more than three years, mostly due to its declining sales to the European Union. Rather unexpectedly, Brazil's rate of inflation during March 2014 is reported to be at the quickest pace in eleven years for that month. Both consumer prices as well as food prices have risen sharply, creating political complexities in the re-election of President Dilma Rousseff.
Moreover, the chronic problem of unemployment in advanced countries continues to plague their economies as the Organisation for Economic Co - Corporation and Development (OECD) announced that during February 2014, unemployment increased marginally which is a setback because it occurred in both the United States and the Euro zone.