Prices of ready seedcotton (Kapas/Phutti) decreased by about Rs 50 per 40 Kgs this week, while lint prices are reported to have conceded Rs 50 to Rs 100 per maund (30.32Kgs) due to increased arrivals. The Pakistan Cotton Ginners Association (PCGA) has also reported higher arrivals of cotton for the current crop (2016/2017) for the period till first of November, 2016.
Total seedcotton arrivals in Pakistan for the current crop till the first of November, 2016 are reported to be 6,948,381 lint equivalent bales (155 Kgs) from which the domestic mills have lifted 4,996,603 bales. Exporters are said to have picked up 121,629 bales while the ginners are holding 1,830,149 unsold bales.
The general price of seedcotton from Sindh was said to have ranged from Rs 2200 to Rs 3050 per 40 Kgs on Thursday, according to the quality. In the Punjab, seedcotton prices were said to have extended from Rs 2800 to Rs 3200 per 40 Kgs in an easy market.
Generally speaking, lint prices in Sindh are said to have ranged from Rs 5400 to Rs 6100 per maund (37.32 Kgs), while in the Punjab the prices of ginned cotton extended from Rs 6000 to Rs 6150 per maund. Sale of cotton was said to have been moderate on Thursday and the tone of the cotton market was reported to be slow.
It is reported by cotton traders in Karachi that the output of the current cotton crop (August 2016/July 2017) would be about 11.5 million bales (155 Kgs) on an ex-gin basis. Domestic mills consumption is being projected at 14.5 million bales. Domestic mills may therefore need to import about three million bales. Exporters may ship between 150,000 to 200,000 bales of cotton.
Yarns and textile items sale is reported to continue to be on the weak side in the domestic market. It has also been reported by the brokers that international prices of textile items continue to remain subdued.
In another news items, the Minister for National food Security and Research Sikandar Hayat Khan Bosan said on last Monday that no duty-free cotton import will be allowed until and unless all the locally produced cotton is sold out completely. The minister reiterated the stance of the government to protect the cotton growers which is included in the priorities of the government.
In this regard, we may recall the recommendation of the Karachi Cotton Association (KCA) who have always called for free import and exports of cotton without imposing taxes. The KCA has always contended that free cotton trade has worked very well historically over the past several decades which has benefited the entire cotton economy, including the growers. Government's interventions in cotton trade have always been harmful.
On the global economic and financial front, uncertainty has grown steadily and unmistakably around the world without any cessation. In the net analysis, even if there is a modicum of improvement in economic growth, it mostly remains weak and endurable. One can hardly recall a period in recent human history when so many economic problems have erupted around the world and despite indiscriminate pumping of large sums of money by the sundry central banks into the monetary system, hardly any sustained improvement is visible in the global economy.
Economists say that in such a scenario investments by sundry firms and corporations remain lacklustre, new hiring mostly remains minimal and consumers at large have reduced their spending. Despite tireless coaxing and cajoling by the central banks and the various governments around the world, consumers are not buying goods with full confidence and fear that the global economy will slacken further.
Continuing political wrangling in several countries, sharply rising refugee problems in Greece, France, Spain, Albania, Macedonia, other southern European countries and decreasing global trade including shipments of crude oil and other commodities have pressurised the global economy to a minimal growth rate. Increasing corruption and civil wars in some countries has also struck a notable blow to several economies around the world like those of Brazil, South Africa, Russia and Turkey. In Yemen, horrific civil war is going on where seven million people are desperately in need food.
For instance, Fitch Ratings has observed that the Russian economy must struggle to achieve pre-crisis growth levels due to weaker demand and low spending by the consumers. There is also universal anxiety over the bitter presidential election being fought between Hillary Clinton and Donal Trump which could lead to bitter consequences for the United States of America. Rears of civil discord and disruption seen in the country. Thus election jitters in America are also negatively influencing economic and financial activity around the world.
Thus early this week most equity markets around the world, including FTSE, Wall Street, European, Australian, Indian and Southwest Asian shares were either subdued or fell flat. On last Wednesday, AFP reported from Fort Lauderdale in Florida that "With less than one week to go until election day, a national poll showing Donald Trump with a narrow lead over Hillary Clinton sent global financial markets tumbling Wednesday, as both candidates focused on scrapping votes in battle ground states". It was reported from Tokyo that "Trump Risk" has scared the investors.
In China, a series of asset bubbles are said to be deepening worries that credit expansion has gone too far. The United Kingdom has reportedly said that President Putin threatens global stability. An intelligence official is reported to have said that he is alarmed at Putin's aggression which is threatening UK's stability and he is also fiddling with the American elections from long distance. Thus we see little hope of economic revival and rehabilitation around the world in the foreseeable future.