Cotton market barely steady

Attention: open in a new window. PDFPrintE-mail

From International Desk - Special Reports

Sporadic buying by the mills and the exporters has characterised our market this week.

Slow turnover in both cotton and textiles has been reported in our market which mostly lacks cheer.

Our market may now discover a new bottom even though global fibre prices appear subdued and may encounter more pressure.

Willy nilly, most if not many of our textile units have generally kept operating after finding alternate supplies and sources of energy (gas and electric power) even if public supply of these utilities have diminished.

Therefore presently there may be a tendency for cotton prices to maintain these levels unless there is further sizeable decline in global economic fundamentals or a substantial decrease in the New York Futures (ICE) prices.Thus seedcotton (Kapas/Phutti) prices in Sindh were nominally priced from Rs 1,700 to Rs 2,300 per 40 kgs and those in Punjab reportedly ranged from Rs 1,800 to Rs 2,600 per 40 kgs.

Due to approaching end of the season, an increase of Rs 100 per 40 kilogrammes was seen.

Seedcotton arrivals are said to be sporadic.Lint prices in Sindh were said to have ranged from Rs 3,800 to Rs 5,400 per maund (37.32 kgs) in a relatively quiet market.

Punjab lint prices extended from Rs 4,000 to Rs 5,600 per maund on Thursday.

Textile mills are said to be selling some of their products on credit basis to boost their sales.

The Indian cotton conundrum continues to be mired in uncertainty and indecisiveness as infighting between the various lobbies, ministries and trade bodies continues unabated.The International Cotton Association (ICA), the primary and a leading facilitator and arbitrator of cotton trade, is dismayed by the action of the Indian government to ban cotton export and then lift it again after six days.

However, the continuing lack of cotton export policy of India has put a spanner in the works and disturbed a generally well-performing global cotton trade system under the ICA.According to Khawaja Muhammad Anees, President of the Dera Ghazi Khan Chamber of Commerce and Industry (DGKCCI), the Pakistan textile industry may need to import one million bales of cotton.

Khawaja Anees puts the domestic textile consumption this season (2011-2012) at 15 million local size bales.

The market estimate of this season's output is now estimated to be close to 15 million domestic size bales from which the exporters will have shipped one million bales.Death occurred this week of Mian Mohammad Saleem, chairman of Nishat Chunian Limited, a leading textile magnate with wide interest in other trades and industry.

May Allah Almightly rest his soul in eternal peace.

On the global economic and financial front, most equity values around the world posted handsome gains for several reasons.

First and foremost, Greek economic depredation and financial hollowness are now deemed to be manageable since the private investors as well as the public sector debtors are deemed to have accepted a plausible plan to defray immediate or second default by Greece.

Some call this development "Controlled default" by Greece.Secondly, the world is a flush with massive infusions of cash into the global banking system at negligible rates of interest, thanks to the United States Federal Reserve and the European Central Bank.

Thirdly, crude oil and sundry minerals hitherto devoured by China have given a financial boost to commodity suppliers ranging from Australia and Brazil to South Asia, Iran and the Arab oil producers.

The Russian Republic is also a prime beneficiary due to its oil and gas reserves the prices of which have risen sharply.Be that as it may, several economic trouble spots around the world remind us of the vast problems we still face in restoring and rehabilitating the global financial system and economic health.

To begin with, Chinese premier Wen Jiabao has reportedly cautioned that China must embrace a slower pace of growth and a more progressive political system.

Otherwise, Jiabao fears that the Chinese economy would falter and the difference between the rich and poor will widen which could lead to a social disaster.Jiabao pleaded for a more resilient and flexible growth which should avoid the stupendous rise in property prices and curb inflation risks.

He also appeared very worried about the massive debts piled up by local governments in China which could go to replicate the earlier "Cultural Revolution" and lead to social upheaval in Chinese society.

Gone are the days when China could boast of a double digit economic growth.

If China encounters a hard landing, can the rest of the world bear the ensuing monumental shock it will engenderTo begin with, Shanghai shares are reported to have posted their biggest daily loss this year on last Wednesday.

Hong Kong markets were also dragged down in tandem.

On fears of lowering Chinese demand from the mining sector, Britain's top Index FTSE retreated on last Wednesday.

In the Eurozone, with the rise in energy prices which pulled up the cost of living, inflation may inflict another blow to the Eurozone economy which is still reeling from a stagnant economy which would belie the idea that Europeans debt crisis may start moderating.Many businesses are in ruins in Japan where the bureaucratic delays are aggravating the problem of economic recovery.

Thus the electronics industry in Japan has been badly mauled.

A recent lowering of the value of the Japanese Yen may provide a modicum of relief to the Japanese exporters who are in the forefront of the Japanese economic efforts, but long-term strength of the Yen has hurt the Japanese economy drastically.

Thus there are few signs at present that the health of the global economy will improve in the foreseeable future.

Courtesy: Business Recorder

forex pakistan

Forex open Market rates & comments Archive