The cotton trading was down early in week when consumers said prices were too high but gradually sellers realised keeping prices firm was counter productive hence spot was slashed to Rs 8800 from opening Rs 9500 on Thursday while week-end saw spot at.

WORLD SCENARIO:

Cotton futures maintained firm outlook despite volatility persisting compared with other commodities, cotton stood second in performance.

India, which seems to have record production of 33 million bales, planned to ship, but discontinued apparently on pretext of rains, which intervened regular supplies.

The buyers dependent on imports from India, however took differently - the prices looking up held supplies which should have continued under already signed accord.

Pakistan, which looked Indian supplies of great help approached authorities for releasing nearly one million bales.

India under pressure asked exporters to ship cotton half of the stocks around 0.5 million bales.

In the meantime rains have also stopped and harvest was to reach ginneries.

China continued to pay attention to its unmanageable inflation, and decided to hold new imports for the time being.

There was nothing from Australia except that it had good cotton yield.

Now major players are eyeing on planting in China and America.

The optimism is being expressed that cotton will be sown on 12.2 million acres - 12 percent higher than 2010.

Meanwhile, cotton futures rose most of the week days with the exception turning depressed on one or two days.

Dollar has been keeping low profile which aided commodities related to it cotton including.

On Monday the US cotton futures settled easier on speculative sales as the market fell for the first time in four sessions, but volumes remained modest as the trade looked toward release of a government crop report by the end of the week.

The benchmark March cotton contract on ICE Futures US fell 1.91 cents to conclude at $1.3043 per lb, dealing from $1.2803 to $1.3534.

On Tuesday the US cotton futures ended down for a second consecutive day, as prices extended a phase of consolidation from recent gains and buyers sided with caution in front of a government crop report due at the end of the week.

The benchmark March cotton contract on ICE Futures US eased 0.06 cent to end at $1.3037 per lb, after moving from $1.2821 to $1.3425.

Volume reached 22,600 lots by 3 pm EST (2000 GMT), about 37 percent below the 30-day average of 36,000 lots, Thomson Reuters preliminary data showed.

Market players expect volumes to remain relatively low ahead of the monthly supply/demand report from the US Agriculture Department due out on Friday.

On Wednesday the US cotton futures closed mixed as players braced for reports due from the US Agriculture Department (USDA) on Thursday and Friday.

The benchmark March cotton contract on ICE Futures US rose 1.58 cents to end at $1.3195 per lb, after moving from $1.2642 to $1.3372.

The rest of the board ranged from 2.60 cents lower to 0.89 cent firmer.

Volume traded hit 24,762 lots, over a third below the 30-day average of 35,335 lots, Thomson Reuters preliminary data showed.

On Thursday the US cotton futures finished up by their daily limit on investor buying spurred partly by strong export sales and talk that Indian cotton exports may fall short of trade expectations.

The benchmark March cotton contract on ICE Futures US rose by the 4.00-cent limit to finish at $1.3595 per lb, with the session low at $1.2967.

Trading volume hit 13,340 lots, about two-thirds below the 30-day average of 35,361 lots, Thomson Reuters preliminary data showed.

That would be the lowest daily volume since October 6.

On Friday the US cotton futures closed higher on investor buying in moderate trade, with analysts saying a government crop report underlined tight supplies in the market.

The benchmark March cotton contract on ICE Futures US rose 1.02 cents to finish at $1.3697 per lb, trading from $1.353 to $1.4095.

On the week, the market gained 3.5 percent.

Trading volume hit about 27,336 lots, roughly a quarter below the 30-day average of 35,361 lots, Thomson Reuters preliminary data showed.

Business has recently slowed.

On Thursday, cotton volume reached a three-month low of 15,036 lots, exchange data showed.

The March contract climbed by the five-cent daily limit ahead of the US Agriculture Department's monthly supply report but "slowly sold off" after the release of the data, said Lou Barbera, an analyst for brokerage VIP Commodities.

LOCAL TRADING:

On the opening of the new week low demand in cotton was witnessed on the cotton market where nearly 20,000 bales of cotton changed hand as spot-rate was slashed by Rs 200 to Rs 9500, seed cotton prices were marked in Sindh and Punjab at Rs 4100 and Rs 4300.

In ready prices ranged between Rs 9300 and Rs 10,000.

Depressed buying was thought to be perception that cotton rate will come down further in view of the weakness seen in world markets.

On Tuesday spot rate was lowered by another Rs 300 to Rs 9200.

The buyers lifted around 30,000 bales, as prices came down to their psychological level.

The prices the buyers had lifted ranged between Rs 8,800 and Rs 9,500.

The market sources said buyers laid hands on some 30,000 bales but buying could have been above the present level, but volatility in world markets kept buyer at a distance for obvious reasons.

On Wednesday by and large trading pace slackened as 22,000 bales of cotton were lifted in price range of Rs 8,800 and Rs 9500.

Spot rate was unchanged with hope that sale will be higher but buyers expected further slashing.

Phutti prices lost Rs 100 both in Sindh and Punjab selling at Rs 3,800 and Rs 4,000.

Fresh news about Indian decision when to ship surplus cotton was awaited in Pakistan.

On Thursday spot rate was further down to Rs 8800, buyers lifted around 24,000 bales in price range of Rs 8300 and Rs 9000.

Phutti in Punjab and Sindh ruled unchanged at Rs 3800 and Rs 4000.

The market sources appreciated turn in prices hoping prices are moving to stabilise.

On Friday influenced with the NY cotton market track the domestic cotton prices resisted further slide.

The Karachi Cotton Association (KCA) spot rate, which came down sharply during the last sessions, resisted fresh fall holding the overnight level at Rs 8,800.

Seed cotton prices in Sindh and Punjab went up by Rs 200 to Rs 4000-4,200.

In ready business trading was subdued as approximately 10,000 bales of cotton changed hands between Rs 8,500-9,000, they added.

On Saturday upward march re-emerged in the process of speculative buying.

The Karachi Cotton Association (KCA) spot rate was raised by Rs 300 to Rs 9,100.

Seed cotton prices in Sindh and Punjab were unchanged at Rs 4000-4,200, they said.

In ready business trading activity was moderate as approximately 20,000 bales of cotton changed hands between Rs 8,800-9,500.

PAK EXPORTERS WAITING FOR WTO GREEN SIGNAL:

It took years to convert the EU to finally decide in favour of Pak Textile exporters with additional autonomous trade preference considered here to keep economy afloat.

But the philanthropic gesture slily in the wake of unprecedented September flood.

However, wherefrom the sympathy should have come with comparatively greater speed the US measures are said to be in process.

The EU gift was not without lacuna as the same was subject to clearance from the yet to be finalised - WTO.

The EU decision will have to be submitted for final nod from council for trade in goods for a waiver from GATT articles I and XIII.

May be consultation with some of the EU member states who harboured reservations.

Pak envoy will be around to remove causes of reservations Bangladesh seems to have been confused over the decision taking for granted that it will undermine its exports.

How long review will take has not been made clear.

The Pak exporters must pray for the exercises to yield desired result.

If waiver is granted, which is likely, mills chimney start spilling out black and grey smoke while workers wait for opportunity are on their mark.

The offer has been welcomed by majority of industrialists.

Only thing is how soon their wait ends.

The cotton buying without minding price is tacit indication only go ahead signal is awaited.

COTTON CONTROL ACT AMENDMENT:

The amendment in control act was desired but amendment was merely talked.

However, Dr Anjum Ali in a report said that Punjab Chief Minister was serious and wants amendment in cotton with the consent of stakeholders.

A delegations of PCGA headed by Vice-Chairman (South) said the Punjab government was seriously implementing its programme for the modernisation and up gradation of ginning industry to save energy and packing of the ginners cotton according international standard.

The stress was also onto mentally prepare cotton bales of 170 kg each.

Such moves are often seen here discussed but some hitch comes in giving at practical shape.

How badly our fine quality cotton is considered can be seen from example that some forced discount which cost us in billions are agreed.

It is over a year or even more some ginners visited India, Turkey and some other countries to see on the spot how cotton is ginned in those countries and forced discount hardly comes in the way.

The "debate" takes too long who is responsible for dirt full supply of phutti? The growers put the blame on cotton pickers while ginners are also not spared who sell.

This also has to be decided and stopped henceforth so that not only cotton is bought by foreigners on discount but textile made-up too looked down upon.

The textile manufacturers have to suffer often.

The points raised above need to be taken up earnestly.

TEX INDUSTRY PROTECTION, DEVELOPMENT LOW:

If implemented earnestly the textile industry is capable to fulfil dreams of authorities and manufacturers and exporters of textile products.

The kitty of course could also appear healthy and cheerful.

Until some knowledge based export sector takes over or even supplement textile sectors contribution this sector is loudly claimed as the back bone of economy.

Some years back when textile sector used to be a baby of either commerce or the finance ministry, many had in their hearts of heart that a textile ministry was the need of our which will be able to harmonise different textile sectors such as cotton, yarn, fabrics and made up exporters.

The value-added sector, which is dependent on raw and semi-raw material is made to run from pillar to post.

So far authorities including textile ministry seemed to have either not understood the value of made up or they have been simply not bothered.

The value-added textile products, as is claimed by the exporters have capability to earn ten times more than any textile goods.

The national assembly's standing body has recommended to the textile ministry to introduce new law to check stock piling and hoarding of raw cotton and yarn for, rightly so, development of textile industry.

Textile industry facing a number of hurdles remnants of authorities who do not know the trick of the trade but rule at right.

One hopes NA body's suggestion will be taken in right earnest.

NOW MARK-UP RATE ON BANK CREDIT:

The industrialists were a bid satisfied with the favour the EU did by granting easier access to its markets.

The favour indeed has been under review and any thing from cheer to disappointment may end up.

But the joy they were showing exposed their determination to their best and give economy what it deserves.

They have only very recently been slightly forgotten about high cost of doing business.

But apparently for the above target borrowing that was instrumental in forcing the central bank to stretch mark up to 14 percent.

How mark-up increment is going to set habit of borrowing above authorities right interested quarters will watch closely.

The bank has done to achieve dual purpose - to deter unlimited borrowing and inflation hike at quick gaps.

The intention is good and must have been given effect unwillingly to be sure.

Authorities must have for a second focused on exports which have stayed much below imports.

The exporters more imminently the textile exporters have long been struggling for heading rivals in markets abroad.

But right from raw material cotton yarn to essentials in processing and production they are faced with high cost of doing business.

Now comes the mark-up, which will discourage balancing modernisation and replenishment.

How exporters facing host of lacuna will manage would depend on individual industrials.

The great jubilation observed as the EU imports have opened up opportunity in fact brings in its wake worries.

But the moments, days, weeks won't stop while exports will show if jubilation was qualified?

Copyright Business Recorder, 2010

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