KCA spot rate, lint prices on domestic market remain at high levels; US futures scaling new heights

As world cotton futures rose seven cent limit, ginners seized the opportunity to push spot rate by Rs300 to Rs11,800 per maund, while phutti also soared in Punjab and Sindh during the week ended on February 19, 2011.
WORLD SCENARIO:
Most of the analysts meet on one point that cotton crop had already been harvested. No 2 supplier India has been seemingly holding back stocks for perhaps home needs, March 31, 2011 is being watched for potential plantings. Indian attitude has bewildered victims who question how international accord be thrown down the drains like that.
The outgoing week USDA released its 10-year baseline figures showing planting forecasts rose to 12.8 million acres yielding on crop of 19.3m bales. Australia has not reported about damage and if there is major development as far as supply to such hit users who have somehow less than they need for textile exports.
Pakistan is one such country in deep trouble. This country has been deprived of genuine accord of over one million bale help just for rising prices. In 21st century such things should be improvised. Besides, reports about two countries thrashing out over 60 years of jumbled up issues.
American cotton stocks are said to have been nearly exhausted. Cotton producers from African countries are silent. Americans usually buy cotton from African countries so those growers there are encouraged. Meanwhile option trade halted for in definite period after prices soared to double the seven-cent limit of corresponding future prices.
On Monday the US cotton futures fell sharply at close, with the key March contract settling down more than two percent, after options expirations left many speculators holding long futures positions, prompting them to grab profits in a selling spree. Over the weekend, cotton call options that expired in the money on Friday were assigned and exercised, resulting in a slew of new long futures positions among speculative interests at Monday's start.
On Tuesday the US cotton futures recouped all of its day's earlier losses to end with strong gains of more than two percent, as some speculators were thought to be grabbing fiber futures on dips in a market that remains exceptionally tight on supplies. Benchmark March cotton contracts on ICE Futures US finished with 3.97-cent gains, a 2.13 percent increase, at $1.9002 cents a lb. On Monday, cotton prices slid by almost the same amount as Tuesday's rise to levels just short of the all-time high. On Friday, spot fiber futures advanced to an historic record of $1.9455 per lb.
On Wednesday the US cotton futures surged to their seven cent upside limit, setting an all-time high, early and stayed there until the close as mills rushed to fix prices on cotton bought on-call before the upcoming delivery date for March futures. Because Monday is US President's Day, delivery notices for the March cotton contract will be issued on Friday afternoon for Tuesday delivery, forcing many mills who purchased cotton on call to fix prices by then. Benchmark March cotton on ICE Futures US finished at $1.9702 cents a lb., up seven cents, or 3.68 percent. May, July and October contracts all also ended at their seven-cent limits. Synthetic values, derived from moves on the options market, showed May futures got as high at $2.0193 per lb, easing to about $2.00 by the close, suggesting prices will keep rising.
On Thursday the US cotton futures raced to their seven cent upside limit shortly after overnight session opened on Thursday and remained there until the close, setting a new record, as mills rushed to price cotton ahead of first notice day. With the Monday US President's Day holiday, next Tuesday is first notice day and March cotton notices must be submitted by 5 pm EST (2200 GMT) on Friday. March cotton on ICE Futures US closed up seven cents, or 3.55 percent, at $2.0402 cents a lb. an all-time high. Now benchmark May cotton also soared seven cents, or 3.59 percent, to the upper limit at $2.0193 and ended there. Volume in March futures came to 6,975 lots, with open interest now at 13,427 lots. May volume rose to 9,301 lots with open interest growing to 70,469 lots. After both March and May contracts were locked at the seven cent limit, many players tried to execute their cotton trades synthetically via the options market.
On Friday the US cotton futures soared in the overnight session to an all-time high at $2.1102 cents in the March contract, then slid by the seven cent downside limit in Friday's mid-morning where prices stayed up to the close. A short while later, ICE Futures US suspended trading in cotton options when they fell by 14 cents, twice the limit for futures prices, paralysing the market for a second day. All but one contract ended down by the seven cent limit, with March cotton on ICE Futures US finishing at $1.9702 cents, a 3.43 percent decline, after setting a new record high overnight at $2.1102 a lb. Benchmark May cotton also dropped seven cents, or 3.47 percent, to close at the downside limit of $1.9493. It set a high at $2.0893 overnight. Volume was robust in both contracts, with 10,384 March lots and 18,145 May lots changing hands. Since Tuesday, a rush by mills to price cotton that was bought on call last year basis the March contract drove futures prices to ever-higher record levels.
LOCAL TRADING:
Sparse trading on the cotton market was witnessed on the opening session as buyers sidelined to watch fresh development in line with fall in China. However, market as a whole was expecting other way round - surging $20 lb. The spot rate was unchanged at Rs11,500, phutti rate stayed put at Rs4500 and Rs5500 in Sindh and Punjab. In ready business 8000 bales of cotton were lifted in price range of Rs11,300 and Rs12,000 per maund.
On Tuesday buying remained at lower level ahead of Eid-e-Milad-un-Nabi (PBUH) holiday as spot rate stayed put at Rs11,500. High cost discouraged buyers and hope settlement with the Indian might ensure delivery at Wagah, phutti stayed put in Sindh and Punjab as 6000 bales of cotton changed hands.
On Thursday spot rate was stretched further by Rs300 to Rs11,800, while phutti too was up by Rs200 to Rs4500 and Rs5900. Nearly 14000 bales of cotton changed hands at Rs12,000 and Rs12500. The market sources were eyeing on world rates, which are on the rise, particularly China and Pakistan in time. However, orders in hand for exports have to be honoured and hence buying of immediate needs continue.
On Friday steady trend was seen on the cotton market as some mills showed a little interest in fresh purchasing to meet their urgent needs. Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 11,800. Phutti prices in Sindh and Punjab stayed put at Rs 4500-5900. In the ready business, about 4000 bales of cotton changed hands between Rs 12,000-13,000.
On Saturday subdued business was again witnessed, as mills were on the sidelines due to higher prices. Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 11,800. Phutti prices in Sindh and Punjab were unchanged at Rs 4500-5900. In the ready business about 4000 bales of cotton changed hands between Rs 12,200-13,000. According to the market sources mills are double minded about the future cotton outlook as it looks that persistent rise may create problems for them in dealing with the export obligations in the coming days.
MANPOWER CAPACITY BUILDING:
No regret taking blame on ourselves - Pak textile exporters for shepherding bare footed, half clad, well built youngmen loitering around the perhaps not very merely equipped industries. The ugly fact that employing raw hand at one or two meals in common today. Except few government makers, who, more to serve their own purpose than the ones who in search of means of survival, pick up from industry periphery. For some years minimum wages are being allowed in keeping with the election manifesto, but also has time in hand to go round finding the poor follows receiving the announced wage. Such wage rises are more often are talked loudly for creating soft corner among authorities whose signs work.
Report datelined Beijing speaks of Pak request for assistance from China in vocational and technical training in such field encouraging value addition. Pakistan particularly needs capacity building in its manpower in sectors like textile (backbone of our economy), gems and jewellery, ceramics, surgical instruments, leather and light engineering. It is well-known self-made people in Sialkot, Faisalabad, Lahore and Karachi are producing quality goods are attracting goods on merit - besides textile products, which have markets in America, the European Union and elsewhere, sports goods and kits and gems and jewellery exports are gradually creating markets.
However, the trade deficit for Pakistan is $5.2 billion. In order to narrow trade deficit as far as practical China would be sending purchases missions for Chinese markets shortly.
STRENGTHEN "BRAND CULTURE," PLEASE!
Gainful advice to Pak exporters, particularly the textile made-ups has always fallen flat, be it switching over to garments, knitwear, towels or regarding strengthening 'Brand Culture', Visiting prospective markets for sale is also hardly experienced.
The other day textile exporters chanced to explore prospect in Ukraine. They wrote back to fellow exporters to rush before rival exporters snatch the business. What resulted in contacts with exporters is not clear, but a vast market existed there. Hemtextile four in Frankfurt was a lust, and indeed is still today visited by buyers from world over and big orders are secured.
Lately Trade Development Authority of Pakistan (TDAP) arranges visits for sales of various exportable items. The result of last seven months is said to be 20pc growth. How law and order problem in the country pays authority, as the eager importers of various goods stay away telling on the growth. For years textile importers grudged too much stress on production of yarn.
But the semi raw material was loved to be exported and thus harm made up exports from this country. The latest calls are heard in frequency that Pakistan exporters create "brand culture". The authorities should expedite brand culture so that it helped placing in orders. It is hoped call from British business tycoon is accorded due respect.
2011 'TEXTILE YEAR'
Unfortunately despite being decidedly major supportive of the limping economy, textile sector has been surviving with occasional hiccup, though. The place it deserves has been refused or ignored to bestow upon, primarily, all the land God has conferred upon this country is not owned or shared by the real growers. The landlords cunningly reserve part of their huge holding to primarily feed him and family plus meeting wide variety of mundane needs. The rest lie as a worthless stuff for those who run for two square meals but they do hardly always enjoy.
The nation has often heard of certain manifesto of political parties to be given land to landless, but till today tons of land be as unchallenged wealth of the owners Thank God. The textile sector will wear turbaned of distinction with '2011 TEXTILE YEAR'. The pained value-added sector often would reach authorities in suppressed low to inform them, sector had been either not getting some raw materials or available at formidable price. The 2011 is right-now streaming down swiftly and many growers with best of muscles and art of growing may have been looking to contribute to the hungry and needy.
A report datelined Islamabad speaks about the 'textile year' - during the 'textile year' the state land in the command area of new dams being built in Sindh and Balochistan will be distributed free among the poor women of the area for growing cotton' - Ameen.
20PC TEXTILE EXPORTS GROWTH RECORDED:
When the gloomy 2010 was in progress, and the value-added sector, was expressing failure to obtain essential raw material, who could say with certainty textile sector will record 20pc growth in seven months. The value-added sector is not aggressive ever. If ever it voiced to it raw material or any input needs, in oppressed tone. The textile keepers would till recently either finance ministry or commerce ministry. Until textile ministry was given a 'shape' a couple of years back 'voice' for a separate textile ministry was in the air after small gaps. At last a textile ministry started operation without any significant show until ministry took effective moves that yielded results not seen before.
All these good words about textile minister on one side, no harm. But what prompted for this? Likely inclusion of the minister when the cabinet reshuffle is given effect. Or show of attachment for continuance of the minister in the present capacity and place. Early 2010 was grave crisis like because orders for textile value-products were pouring.
The EU duty free access was a certainty for either reason, textile value-added sector needs yarn and at reasonable price so that edge is preserved provided competition was unavoidable. Whatever the matter, the textile minister is safe as cabinet reshuffle has, partly given effect to and any change of mishap in near future was quite distant.