After battering the Bahamas, hurricane Matthews was heading towards Florida, Georgia and the Carolinas which are presently forecast to only damage the coastal areas, but traders were worried that it would destroy large parts of the south-east United States and disrupt the life there. Later it was reported that hurricane Matthew strengthened to a very dangerous Category 4 with maximum sustained winds of 140 mph and gusts of 165 mph, the National Hurricane Centre said. In the meantime trading in cotton was reported to be choppy with recurrent fluctuations. In Pakistan also, domestic cotton trade has been following a seesaw pattern with lint prices fluctuating up and down intermittently.
Sentiment of cotton prices on the ready domestic market has been reported to be mixed but in a narrow range. Mills are expected to lift some cotton before the 11th and 12th of this month due to closure next week for the observance of religious holidays.
In the meantime, textile traders have informed that the domestic spinning industry is going through very difficult time, while the ginners are also generally suffering losses. Relatively speaking, the cotton growers are faring better.
Seed cotton (Kapas/Phutti) prices from Sindh were said to have ranged from Rs 2800 to Rs 3100 per 40 kgs on Thursday, while in the Punjab seed cotton prices reportedly ranged from Rs 2900 to Rs 3100 per 40 Kgs, according to the quality on Thursday. Lint prices in Sindh are said to have ranged from Rs 5850 per maund (37.32 Kgs) to Rs 6225 per maund while in the Punjab they reportedly extended from Rs 6125 to Rs 6200 per maund. The price sentiment in the ready cotton market was reported to be mixed.
Cotton output projection during the current season (August 2016 / July 2017) has been reduced slightly. The reduction by about 200,000 bales occurred mostly in the Punjab. Now Pakistan is expected to produce about 11.073 million bales (155 Kgs) totally during the current season.
In ready cotton sales in Sindh reported on Thursday, 3000 bales from Upper Sindh were said to have been sold at Rs 6200 to Rs 6225 per maund (37.32 Kgs). In the Punjab, 400 bales from Pir Mahal sold at Rs 6175 per maund, 1000 bales from Harunabad and 2000 bales from Nurpur Nauranga were said to have been sold to Rs 6200 per maund, while 400 bales from Khanewal were said to have been sold to Rs 6225 per maund.
The tone of the ready cotton on Thursday was described as being mixed and somewhat weaker than yesterday. On the global economic and financial front, the International Monetary Fund (IMF) has warned that the world-wide public and private debt is at an all-time high which is seriously hindering the return of global economic growth to regain normalcy. The easy lending policies of the world's leading banks have aggravated the problems which have led to dangerously liberal advancing of loans over the past several years. Such binge of lending is said to have created a plethora of problems in many countries with low incomes and in China particularly.
Most countries in the world are facing slow movement and growth of their economies while many corporate entities as well as countries are confronting liquidity problems and are sagging monetarily because of the unduly large debt burdens which they are carrying. This situation is dragging down the growth of several countries which is likely to breed fresh economic crises around the world as record high borrowing has become unsustainable.
In another report from Washington D.C., the news agency AFP has reported that the banking problems of Europe highlight global financial risks which show the extraordinary weakness of prevailing the global financial system. It is reported that many of the loans are of poor quality extended on notably thin margins. The IMF reportedly became worried when "Germany's largest but capital-weak and troubled lender" Deutsche Bank appeared into the limelight with its weaknesses.
It therefore was no surprise that the shares of Deutsche Bank collapsed at the end of last month by about seven percent to a thirty year low. Then head upon heels came the bombshell that Germany's second biggest bank, Commerz Bank, divulged plans to cut about ten thousand jobs and suspend its dividend for the first time. Such pronouncements coming from Germany shook up the European financial sector which news went viral globally.
The International Monetary Fund (IMF) has observed that the American economy will grow by only 1.6 percent this year as compared to 2.6 percent in 2015. The reduction in the American growth rate is primarily due to a sluggish second quarter growth in the United States. Moreover, IMF has added that the American economy has lost momentum over the past few quarters.
Other ills pestering the global economy include the fall of pound sterling to a 31 year low level in New York this week and increasing protectionism around the world. The Eurozone economy collectively is also performing poorly as it recorded tepid growth for the month of September hardly providing any hope for improvement for the foreseeable future. IHS Market has assessed that the Purchasing Managers Index in the Eurozone has fallen to its lowest level in twenty months. Political uncertainty in Europe, the Middle East, India and Pakistan and also generally the United States has pulled down any hope for immediate economic improvement globally. Some analysts are also predicting a crash in the American economy followed by a global economic break down.