Easy showing on cotton market

The Karachi Cotton Association (KCA) cut its ex-gin price of grade three cotton by Rs 50 per maund (37.32 Kgs) on Thursday and fixed it at Rs 6200 per maund due to dullness on the market. Traders said in Karachi that due to the approaching of the end of the calendar year, coming holidays including Quaid-e-Azam birthday, Christmas and bank closures, there is lack of normal demand and activity in the market.
Thus cotton and yarn prices remained subdued on the domestic markets. Most of the mills sought higher quality of cotton which is not readily available. Exporters remained mostly on the sidelines. Moreover, brokers added that even then international cotton prices were also subdued.
Textile circles added that there was enquiry for only 16/1 and polyester/cotton yarns but other types of yarns were not selling easily. There were also reports that fine quality of yarns was being imported, mostly from India. Otherwise yarn markets were reported to be listless. Growers are reported to have sold 90 to 95 percent of their seed cotton (Kapas/Phutti) from the current crop (August 2016/July 2017) till now. Seed cotton (Kapas/Phutti) prices for good quality are said to have declined by Rs 50 per 40 kilogrammes. In Sindh, the seed cotton prices reportedly ranged from Rs 2600 to Rs 3200 per 40 Kgs on Thursday, while in the Punjab they were said to have extended from Rs 2800 to Rs 3400 per 40 kilogrammes, as per quality.
Lint prices were said to have gone down by almost Rs 100 per maund (37.32 Kgs) this week in the ready market. Thus cotton prices in Sindh are said to have ranged from Rs 5600 to Rs 6500 per maund on Thursday, according to the quality. In the Punjab, cotton prices are said to have ranged from Rs 6200 to Rs 6500 per maund in an easy market with low turnover.
Cotton Conference 2016/2017 was held in India hosted by Cotton Association of India from 5 to 7 December 2016 which was attended by cotton traders, brokers and industrialists from different parts of the world. Different aspects of the cotton economy were discussed. Problems of short cotton crop, higher consumption and demonetisation of Indian currency were also discussed. Pakistan was represented by Adil Osawala, Aamir Osawala, a ginner and cotton importer. Guests were welcomed by Dhiren N. Sheth, President of the Cotton Association of Inida.
In ready cotton sales reported from Sindh on Thursday, 400 bales of cotton from Nawabshah were reported to have been sold at Rs 6250 per maund (37.32 Kgs), 1000 bales each from Rohri and Salehput sold at Rs 6300 per maund, 1000 bales from Sanghar sold at Rs 5500 per maund, while 3000 bales from Upper Sindh sold at Rs 6500 to Rs 6550 per maund.
On the global economic and financial front, the increase in the interest rates by the United States Federal Reserve Bank on last Wednesday for the first time in a year, and only the second time since the financial crisis of 2008, is symbolically significant because this step formally puts forward the American Central Bank's contention that the economy has made significant progress. This signifies that economic growth in America has started to solidify and has crossed the Rubicon.
However, the remarks concerning the American recovery made by the Chairperson of the Federal Reserve Janet Yellen, appeared to be half-hearted at best. She is reported to have said that economic growth in the United States "is a touch stronger, unemployment is a shade lower". She announced a 0.25 percent increase in the benchmark rate to 0.05 to 0.75 percent. The US Federal Reserve has also indicated that three further rates increases will be made during 2017. However, Yellen was quick enough to add that the Federal Reserve was operating under a "cloud of uncertainty".
Last November 9, 2016, there was widespread belief around the world that if Donald Trump won the American presidential election, equities and commodities would plunge deeply and all hell would break loose on the bourses. Equities did slump the day after, but have since climbed upwards to historic high levels. While the US Federal Reserve is reducing its stimulus, the European Central Bank and the Bank of Japan will still be infusing credit into the financial markets. It is generally believed that Trump's election last month has prompted the investors to believe that by large scale spending on infrastructure and providing tax cuts will pull up the American economy materially.
Furthermore, the central banks in Europe, Japan and elsewhere are soon likely to exhaust their resources as they have been providing large chunks of money for nearly a decade.
However, what might do the trick to revive economic growth should be to provide fiscal aid as most monetary measures have exhausted their utility.
It is not only the Brexit issue which will possibly extend for the next decade or two, there are already loud whispers that London's primacy and clout as the world's foremost financial center could lose a large portion of its business to New York.
Besides the political uncertainties in the United States, Europe, the Middle East, China, India and the shattered socio economic conditions of Greece, Italy, Libya, Iraq, Iran, Saudi Arabia, Syria, Yemen, Venezuela, Brazil, North Africa, Russia and the terrible refugee problems in and around the Mediterranean Sea hardly provide much hope to remedy the highly disturbed global socio-economic condition.