Caution dominated week's proceedings resulting in small lifting; spot rate cut by Rs 500

Cautious cotton trading led to slice rate and smaller lifting, buyers expecting reasonably low cut looking at the global trend. The opening day saw spot cut by Rs 500 to Rs 8500 till the end of the week.
WORLD SCENARIO:
The cotton futures late last week gave a different look by drifting down. In Pakistan, therefore, great ease was sighted, though the sellers were miserly offering for sales greatly relieved owing to sufficient cotton stock and time to tackle as they wish. Local cotton buyers have been expecting spacious new crop arrival and India may soften attitude due to sound appeal to delivery cotton against accord reached in March.
As reports resound with comfortable surpluses in Brazil, Argentina, Uzbekistan and Australia infusing confidence cotton will not be that problem. China is planning to grow more cotton and keep inventory at satisfactory level through imports. India is self-composed delivering message it has good crop and will enjoy smooth exports of cotton and textile products. Bangladesh and Sri Lanka both seeking into cotton surplus areas and arranging to feed their mills well. BD is pursuing Pakistan, nagging about high cost of doing business to land there and export. The US is not absolutely hopeful to bumper exports owing to drought in Texas and floods in Mississippi.
On Monday the US cotton futures ended mixed, as the market consolidated after last week's commodity sell-off and players adjusted positions before the release of a key government crop report. The US Agriculture Department's monthly supply/demand report is due on Wednesday. It will contain the first preliminary estimate of supply/demand conditions in the upcoming 2011/12 marketing year (August/July). "I think people are waiting to see (the report)," said Mike Stevens, an independent cotton analyst in Louisiana.
The key July cotton contract on ICE Futures US fell 0.16 cent to settle at $1.454 per lb, trading from $1.4321 to $1.4856. It was the lowest close for cotton in almost four months, Thomson Reuters data showed.
The new-crop December cotton futures rose 1.49 cents to close at $1.2378 cents per lb. Volume traded stood at almost 9,200 lots, nearly two-thirds below the 30-day norm, Thomson Reuters preliminary data showed.
On Tuesday the US cotton futures ended higher on investor short-covering, as the trade braced for release of a key government crop report on Wednesday. It will contain the first estimate of global supply/demand conditions in the upcoming 2011/12 marketing year (August/July). The key July cotton contract on ICE Futures US rose the six-cent limit to settle at $1.514 per lb, with the day's low at $1.43. The new-crop December cotton futures went up 2.14 cents to close at $1.2592 cents per lb. Volume traded stood at almost 17,700 lots, about a fifth below the two-thirds below the 30-day norm, Thomson Reuters preliminary data showed. July shot up on switch trade and short-covering, running higher because it was heavily oversold, dealers said. The rest of the board posted much more modest increases.
On Wednesday the US cotton futures reeled from investor sales to finish lower, as another round of liquidation hit the commodities sector. The key July cotton contract on ICE Futures US dropped 1.10 cents to settle at $1.503 per lb, dealing from $1.4776 to $1.5512. The new-crop December cotton futures shed 0.73 cent to close at $1.2519 cents. Volume traded stood at around 17,600 lots, about a quarter below the 30-day norm, Thomson Reuters preliminary data showed. "The spill-over from crude, silver and gold and the sharply higher dollar hit cotton," said Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia.
On Thursday the US cotton futures crumbled in the face of investor liquidation to finish at a four-month low as the sell-off in the commodities sector weighed on fibre contracts. Although analysts said the sell-off seemed to be abating cotton futures still skidded to its lowest level since the middle of January. The key July cotton contract on ICE Futures US dropped the six-cent daily limit to close at $1.443 per lb, with the session top at $1.5512. T
he new-crop December cotton futures lost six cents as well to finish at $1.1919 per lb. Volume traded stood around 10,600 lots, over 50 percent below the 30-day norm, Thomson Reuters preliminary data showed.
On Friday the US cotton futures settled mixed, as the market tried to find its footing after another sell-off in the commodities sector this week. The key July cotton contract on ICE Futures US increased 0.85 cent to close at $1.4515 per lb, dealing from $1.4206 to $1.4849. On the week, the market is down 0.28 percent. The new-crop December cotton futures lost 3.58 cents or by three percent to finish at $1.1561 per lb. Volume traded stood around 14,400 lots, almost two-thirds below the 30-day norm, Thomson Reuters preliminary data showed.
LOCAL TRADING:
Trading in cotton seemed to turning favourable for the buyers, as global cotton futures had continued to dwindle under uneasy conditions marked in Africa, Middle East and Japan. Cotton consumers took the dip easy and expected further relaxation in the prices.
They bought nearly 3000 bales in price range of Rs 8000 and Rs 8450, depending on quality. Spot rate was lowered by Rs 500 to Rs 8500. In Sindh and Punjab low type was priced at Rs 2500, while the better type was selling at Rs 3000. The sellers are stiff necked they held manageable stocks.
On Tuesday trading pattern remained slow despite second day of thin going. Spot rate was unchanged while phutti inferior ruled at Rs 2500 and the better type was selling at Rs 3000. In ready buying was seen at 1000 bales in price range of Rs 7500 and Rs 8000. Once again cotton market seems to be in trouble as not all players are reporting favourable going.
On Wednesday cautious buying was prominent, as mills and spinners fell on buying for immediate needs. Spot rate was unchanged AT Rs 8500, phutti in Sindh and Punjab low type was selling at Rs 2500 and the better type sold at Rs 3000. Some 2500 bales were lifted at Rs 6500 and Rs 8200.
On Thursday sustained low rate improved buying particularly helped by cotton exporters who take advantage of falling prices, improved buying reached 6000 bales in price range of Rs 6500 and Rs 8500. Meanwhile, cotton yarn has lost normal demand creating worries among the spinners.
On Friday the exporters' recent demand, caused revival of normal business activity after a long gap. The Karachi Cotton Association (KCA) official spot rate was inert at Rs 8,500. In Sindh and Punjab phutti price of low type was at Rs 2500 and that of superior type at Rs 3000. In ready business over 3000 bales of cotton changed hands between Rs 6,500-8500.
On Saturday mills came back to make new purchasing, resumption of activity caused stability in the rates. The official spot rate was unchanged at Rs 8,500. In Sindh and Punjab phutti price of low type was at Rs 2500 and that of superior type at Rs 3000. In ready business nearly 3,500 bales of cotton changed hands between Rs 8000-8,600.
ENERGY SHORTAGE CAUSING SPINNING MILLS TO CLOSE
The spinning mills and textile exporters not alone need oxygen to keep breathing the whole lot, except a few, Authorities who should keep country, its fields, factories and bazaars lighted ever, are illusioned and talk of getting rid of malaise but surrender before they hand over power to a new comer with renewed enthusiasm to convert country and people's fate.
This malice over and take-over has seen last many decades country's economy and people going down the train, when a leadership will take the high seat this country provides has now gone in the back ground with people losing faith in themselves. People who vote any body in power simply do not know how to use the precious franchise and get comfort of power, gas, transport, and speak loud. There is now feelings are we sovereign people?.
Calling for investment or monetary support is on increase day by day. Exports are suffering in the absence of power, gas, water, roads, markets and complete understanding among those who make products worth exportable possible without ginning ground for nagging by one or the other. The textile ministry is once again in the background and needs to be in forefront settling the issues.
EXPO PAKISTAN IS ANNUAL FEATURE
This year 'Expo Pakistan is likely in October for the sixth time, got deferred earlier in February for disturbed conditions in the country. Similar fairs are held in developed countries where countries with a degree of pride display discoveries and inventions. This country has as a ritual adopted practice of holding annual feat so that machinery, chemicals are available at the "door steps" without travelling pains and strain on purse.
The fair postponed in February will now be held in October, preparation call is given nearly six months ahead. The advance calls never explain what Pakistan have produced or discovered for offer to the hundreds of participants.
Agriculture is backbone of economy and cotton and textile products make economy such and stable. Going deep in the end result what else except cotton and workforce both gifted by God what have we to add to the "gift".
We drain out billions in the purchase of machinery and chemicals and dyes. Besides, huge imports of chemicals and machinery, which changes from time to time with changing taste and fashion. Has any body benchmarked the earning through exports of textile and the exporters and manufacturers incur for the imports of machinery and chemicals and dyes. Nor has ever come from wealthy mind to save Pakistan economy from perennial loss, those who have flourished have given it investment shape and exports throughout the world.
TEXTILE, CLOTHING EXPORTS FACE COMPETITIVE THREAT
A study carried out by Pakistan Institute of Trade and Development states that one-third of textile and clothing face a competitive threat in the post-quota era. It said Pakistan has lost its market share to China in core threatened lines in which world exports rate was fast, while market share to India lost in the slow growing categories.
Further more, it said intense competition is expected in major importing markets of Pakistan ie EU-27 and USA, since safeguard measures on specific Chinese textiles and clothing has expired. Such study gives idea to correct the wrong in authorities control.
The study has not touched that edge but needs to be given due care. After 60 plus years of our independence and free hand in combing and furnishing this country we have little bothered to tame the hostile rush of wayward water, which if could be harnessed for the purpose of growing various agricultural needs such as watering the rice, wheat, sugarcane and other crops, besides allowing the costly water to fall into seas.
Facing rivals in the region won't be any irksome job, unless we ignore, as has been alone thus far, to provide loving care to the potential God has reached out vast fertile land, around sea-coast hubs, rivers properly, Kalabagh dam and Thar coal or extracting copper and gold is soaring sky-high every day, but, ifs and buts are still keeping rulers hesitant.
COTTON FUTURES TRADING IMBROGLIO AGAIN
Quite some months or may be a year or two back, cotton trading futures was in debate, discussion and newspaper reports who of the two claimants should be awarded cotton futures trading rights. The KCA Karachi Cotton Association had been placing before authorities its rightful claim with all the stakeholders taking strongly KCA side. What led to shelve the issue for so long, during which relevant contestants either enjoyed sound ship or waited for "proper" moment to jump into the "arena".
The KCA was still in trance, assumingly confident of its franchise of relevant stakeholders. But before more comments, KCA demand to probe result against SECP approval is desirable.
In the meantime seemingly needs everyone to give ear to "It must be noted that the futures contracts have been opened under the aegis of PMEX, without taking into confidence of all stakeholders as the KCA, APTMA, PCGA, FAP and Pakistan Cotton Forum."