New cotton crop gaining tons of attention

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The new cotton crop (August 2013 - July 2014) in Pakistan has started arriving into the ginneries since the past few weeks but the arrivals have gained momentum since the beginning of this month. Though the arrivals are not very large, but they are achieving regularity. In fact, spinners are now more keen to pick up the new incoming crop.

Till now an estimated 22,000 to 25,000 bales of new cotton crop have been pressed by the ginners. About 18 ginning factories have become operative in Sindh while in the Punjab about 12 factories are ginning the new cotton crop. Daily ginning output is now said to have risen to 2,000 bales. Reports also indicate that nearly 8,000 bales have been booked for export, mainly to India.

New crop (2013-2014) seedcotton (Kapas / Phutti) prices in Sindh are said to be ranging from Rs 2,900 to Rs 2,950 per 40 Kgs, while in the Punjab the prices of seedcotton are said to extend from Rs 3,000 to Rs 3,100 per 40 Kgs, according to the quality. Lint prices of the new crop in Sindh are said to range from Rs 6,450 to Rs 6,475 per maund (37.32 Kgs), according to the quality, while in the Punjab they are said to range from Rs 6,550 to Rs 6,675 per maund.

Both cotton and yarn businesses are said to be steady to firm while interest in purchasing the two is said to be increasing. Mills are said to easily achieve the parity between raw cotton and yarn if the cotton prices range between Rs 6,400 to Rs 6,450 per maund, as mostly obtaining in Sindh. Some exporters are also said to remain active in the market. Now only about 50,000 bales of cotton remain in the market from the old crop (2012 - 2013).

In Sindh, 200 bales of new crop cotton each from Mirpurkhas, Sanghar and Tando Adam and 400 bales from Shahdadpur are said to have been sold on Thursday at Rs 6,450 per maund, while in the Punjab 200 bales from Burewalla were said to have been sold at Rs 6,550 per maund. The tone of the market was firm in the evening. In India also the price of cotton is said to have risen to Rs 41,500 per candy, Markets in the USA are closed for July 4, 2013 due to Independence day.

On the global economic and financial front, the equity markets which started the third quarter on a positive note on last Monday (1st of July 2013) again lapsed into despondency at midweek. Earlier in the week, Wall Street produced a rally with supporting positive data, Tokyo shares pulled up a respectable rally, thanks to a weaker Yen, Gulf shares moved up on belief of a strong earnings season, Indian shares rose to a month-high level thanks to the interest of foreign investors / and FTSE index in London spiked due to positive interest in industrial and construction stocks. Alas, the rise in equities in sundry global markets was short lived.

Then a negative reality dawned upon the investors and gloom set in on Wednesday (3rd July 2013). The events in Egypt where President Mohamed Morsi was later dislodged by the army in a coup and the shares collapsing in Portugal sent most equity markets toppling in unison around the world.

Fears on global bourses fuelled postulates that Egyptian events could go viral in the rest of the Middle East disrupting crude oil supplies around the world. There was also news that oil inventories in the United States were low which perception sent oil prices to 14 months high levels exceeding US Dollars 100 per ton. Then there were reports that Lisbon's key PSI 20 index of leading shares tumbled by 5.31 percent to 5,236.49 points reminding the investors that the Eurozone and indeed in the European Union at large, the economic condition is worsening day by day without recourse to any hope of improvement in the near future.

Taking the negative cue from the American slide on equity markets, Asian markets also adopted a downward trajectory on Wednesday. Also, concerns around the ill health of the Greek economic situation keeps escalating because the leaders are failing to implement the earlier bailout conditions imposed on it by its sundry creditors. Athens could fall short of cash in the not too distant future.

Reports from Madrid indicate that Moody's Investors Service has cut its ratings of three nationalised Spanish banking groups plunging their debt status deeper into junk bond category. The news agency AFP adds that these banks are Bankia, Cataluynya Banc and Nova Caixa Galicia because of their very weak asset quality.

In Dubai, there seems to be acute urgency to raise money to make the massive repayment of Dollars 50 billions over the next three years. Some observers are fearful that it would be a Herculean task for Dubai to implement this undertaking without making extra efforts.

Thus once again the investors around the world have entered into a somber mood and turned gloomy as they see no conclusive sign of an economic turn around in the foreseeable future while banks and sundry other monetary institutions remain mired in deep difficulties.

Courtesy: BR

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