According to cotton traders in Karachi, cotton prices in the ready market on Wednesday suffered a fall of Rs 100 to Rs 200 per maund (37.32 Kgs) ahead of a series of holidays starting from Thursday. Government has declared Thursday and Friday as holidays due to 9th and 10th of Muharram, and thereafter we will hit a weekend. Therefore, practically speaking, full-fledged cotton trading on our market would resume next week on Monday.
On this Wednesday seed cotton, (Kapas/Phutti) prices in Sindh are said to have ranged from Rs 3700 to Rs 3800 per 40 Kgs kilogrammes in a listless market. Seed cotton prices in Punjab ranged from Rs 3500 to Rs 3800 per 40 Kgs, according to the quality.
Lint prices are said to have declined by Rs 100 to Rs 200 per maund (37.32 Kgs) this week. In Sindh, the lint prices are said to have ranged from Rs 8000 to Rs 8200 per maund, while in the Punjab they reportedly ranged from Rs 8100 to Rs 8300 per maund, according to the quality. Weakness in cotton prices was apparent on Wednesday due to lack of adequate interest on part of the spinners.
Traders said in Karachi on Wednesday that New York cotton futures contract No.2 fell nearly three cents per pound in recent trading and other markets like China and India have also conceded losses. American cotton prices were also reported to be down due to the rift between China and America linked to the ongoing tariff war between them. Thus due to weak global cotton advices and forthcoming local holidays in Pakistan, the domestic market was quite subdued. Moreover, the prices of local yarns were also reported to be down.
According to market sources in Karachi, Pakistan is likely to harvest cotton crop of 11.5 to 12 million bales (155 Kgs) during the current season (August 2018/July 2019) on an ex-gin basis.
Mills sources said last week that they would need to import about 4 million bales of cotton this season (2018/2019) to meet the shortfall in the domestic crop. In ready cotton sales in Sindh, 200 bales of cotton from Shahdadpur were said to have been sold at Rs 8000 per maund (37.32 Kgs). In the Punjab, 100 bales from Fakirwali and 800 bales from Haroonabad sold at Rs 8100 per maund, 200 bales from Burewala sold at Rs 8150 per maund and 1000 bales from Rajanpur sold at Rs 8200 per maund.
On the global economic and financial front, recent news was characterized by exchanging of salvos between United States and China clamping more and more tariffs against each other increasingly. Recently, President Donald Trump decided to impose further tariffs of Dollars 200 billions on Chinese goods to be effective later this month. Moreover, this rate of import duty on Chinese goods would shoot up to 25 percent in January 2019 in case China fails to offer concessions.
As a counter measure, China announced that it would levy sundry duties on American goods worth Dollars Sixty billions. This procedure of increasingly slamming import duties of various goods increasingly has become a sort of routine in Sino-American trade which appears to continue unceasingly.
With this rather negative development between China and America continuing unabatedly, a number of economic observers and analysts have forecast weakening of not only the leading global economies which would also engulf the European Union, the United Kingdom and Japan, but also a number of emerging economies. Thus, weakening of global markets, argue the leading economic experts, would not only gradually but certainly lead the world into a recession. Observers in many countries recalled the frightening collapse of Lehman Brothers resulting in a global financial meltdown leading to the Great Recession in 2008.
The rising fear now is that a breakdown of the existing global economic order could easily lead to another Great Recession like the one witnessed in 2008.
No doubt some changes and additional measures have been taken but these reforms appear increasingly insufficient to obtain the desired measure of a resilience to safeguard the existing or the newly created financial system to ensure that another Great Recession is not forthcoming.
Against these fears and apprehensions that the next Great Recession may not be avoidable, several leading economists are already forecasting the appearance of global economic crisis in the near future. Even though China appears to opt for a trade deal with America, several uncertainties are making it uncertain that a timely and workable trade deal will be finalized between America and China which would then provide other countries of the world to save their economies from impending disaster.
If we are to take the recent observations of the Tech tycoon Jack Ma into account, there will be a long drawn trade war between America and China which could last for twenty years. If true, such a prediction could turn the global economic order topsy-turvy and bring untold misery all around the world.