Speedy phutti arrivals put prices under pressure, mills and exporters forward buying helps rates stabilise

The pace of phutti arrivals pressured price which maintained weaker tone until Thursday when almost unnatural rise was marked in spot rate at Rs 5500 and lint seen at Rs 5300-5700 on the last day around.
WORLD SCENARIO
The cotton futures globally inching down with no fundamental back up, but the fall is obviously insignificantly soaring high in quick succession since March 2010, above $2 a pound supported by China and Pakistan now seems to be on the way to harvest 15 million bales, enough for its needs. China where mundane attacks like floods, quakes and inflation will look around for cheapest lint, India is also in line, which is preparing to turn net importer. It has not given reasons for the plight except weather.
There is no mention of Bt cotton caused to be known as the second exporter only to America. Incidentally America has been facing unprecedented drought in largest cotton growing area in Texas and floods along Mississippi river. America assessed only 28 percent crop was likely to survive against 68 percent last season when Gulf of Mexico developed a storm, harm being monitored. Thus about cotton African countries, Latin American countries, Australia and Uzbekistan are with surplus awaiting orders. Experts, however, are not optimists about demand owing to economic plight-Japan is facing and countries in Middle East are grappling. Overall economic scenario and debt conditions in the US and the EU have been affecting cotton price, which so far has lost half of its value and struggling over or under one dollar a pound. Analysts with closer look at progress had little hitch in putting lint prices back around 60/80 cents a pound.
On Monday the NY cotton futures ended easier on investor sales, as a lack of leads and the negative mood brought on by the US debt crisis conspired to keep fibre contracts on the defensive. The key December cotton futures on ICE Futures US fell 1.88 cents to end at 96.76 cents per lb, trading from 95.13 to 98.99 cents. It was the lowest close for the second-position contract since mid-September 2010, Thomson Reuters data showed.
Business was light. Total market volume hit around 8,000 lots potentially the lowest since May 23 and over 50 percent below the 30-day norm.
On Tuesday the NY cotton futures ended limit up as speculators bought on technical signals and analysts said momentum from the rally would continue, analysts said. Benchmark December on ICE Futures US rose its four-cent daily limit to conclude at $1.0076 per lb, with the session low at 93.20 cents. Volume hit around 19,200 lots almost 15 percent above the 30-day norm.
On Wednesday the NY cotton futures finished higher on follow-through investment fund and speculative buying, with traders saying the momentum from the advance may shove fibre contracts up the rest of the week. The key December cotton futures on ICE Futures US rose 2.85 cents or by nearly three percent to finish at $1.0361 per lb, on the heels of a 4.1 percent gain on Tuesday. It traded from 99.85 cents to a high of $1.0444, its highest prices since gapping lower between July 14 and 15. Total market volume hit almost 15,000 lots around seven percent below the 30-day norm.
On Thursday the NY cotton futures settled lower on profit-taking and investor sales to end a brief surge over the last two sessions, with players keeping an eye on the unresolved US debt crisis. The key December cotton futures on ICE Futures US fell 1.04 cents to finish at $1.0257 per lb, trading from $1.0065 to $1.0365. Since hitting a session low of 93.20 cents on Tuesday, cotton shot up by over 12 percent to hit a Wednesday peak at $1.0444, its highest since gapping lower on July 14 and 15. Total market volume on Thursday hit almost 8,400 lots, about 50 percent below the 30-day norm.
On Friday cotton futures settled lower, as the market swung from daily limit down to slightly firmer on the day in a reflection of the deep uncertainty gripping investors worried over the US debt crisis. The key December cotton futures on ICE Futures US fell 0.80 cent to finish at $1.0177 per lb, trading from 98.57 cents to $1.028. On the month, the market is down around 14 percent. But the market's weekly performance showed a three percent gain. Since hitting a session low of 93.20 cents on Tuesday, cotton shot up by over 12 percent to hit a Wednesday peak at $1.0444, its highest since gapping lower on July 14 and July 15.
Total market volume on Friday hit around 11,200 lots at 2:53 pm EDT (1753 GMT), about 30 percent below the 30-day norm, Thomson Reuters preliminary data showed.
LOCAL TRADING
Cotton market sustained downtrend all-round owing to seed cotton speedy arrivals in ginneries. The spot rate was brought down by Rs 300 at a stretch to Rs 5200, seed cotton in Sindh and Punjab down by Rs 300 to Rs 200 to Rs 2100 and Rs 2200. In ready take off 16000 bales of cotton changed hands between Rs 4800 and Rs 5200 depending on quality. The market sources compared cotton under pressure at Rs 2100 against last year's Rs 6000.
On Tuesday phutti prices recovered as growers pulled their courage to demand matching world rate. However, spot rate was dropped for the second consecutive days. Ginners pulled down spot rate by Rs 200 to Rs 5000. In Sindh phutti prices recorded rise of Rs 200 to Rs 2300 and Rs 2400, in Punjab prices rose by Rs 100 to Rs 2200 and Rs 2300 depending on quality.
On Wednesday prices firmed up as sellers were not ready to relax as a result spot rate was pulled up by Rs 200 to Rs 5200, seed cotton in Sindh and Punjab up by Rs 200 to Rs 2300 and Rs 2400. Buyers laid hands of 8000 bales in price range of Rs 5000 to Rs 5350 depending on quality. Market sources expressed disappointment on offer by sellers at higher rate reducing the size.
On Thursday prices registered rise-spot rate was pushed up by Rs 300 to Rs 5,500 Punjab and Sindh seed cotton improved by Rs 100 to Rs 2400 and Rs 2500. Despite rise buyers lifted 10,000 bales of cotton in price range of Rs 5400 and Rs 5800. The rise is seen due to interest in Pak cotton such as from China whose suppliers' India and America are not in a position to supply.
On Friday spot rate was unchanged at Rs 5,500. In both Sindh and Punjab, seed cotton rates are moving between Rs 2300-2500. In the ready business trading activity was good moving around 11,000 bales of cotton changed hands between Rs 5,600-5800.
On Saturday mills and exporters indulged in forward buying amid rising fears of increase in prices. KCA official spot rate was unchanged at Rs 5,500. In both Sindh and Punjab seed cotton rates are moving between Rs 2300-2450. In the ready business trading activity was strong as nearly, 11,000 bales of cotton changed hands between Rs 5,300-5700.
COTTON, TEXTILE SECTORS HAVE WOES, NEED CURE
Authorities should have found some cure after independence, as cotton and textile being the vital source of regular strength to economy. Leaving the annual source of conflict between small cotton farmers, ginners, spinners and value added sectors to emerge annually and flatten one or the other.
Only the other day the ginners felt they were victimised by some all time customers who bought lint when prices roared on three months credit but according to them the payment is not coming per borrowers undertaking. Spinners and value-added manufacturers and exporters have their own interests and grudge as a result. Now the Sindh Chamber of Agriculture (SAC) has accused owners of cotton ginning factories of having formed a cartel on the pattern of sugar mill owners and urged that farmers should be paid according to international market rates. Quite often when supply and demand suite entrepreneurs they arbitrarily linked interest with this most popular of the economic principle. Without however keeping in view the "ethics". Demanding prices matching prices are ruling in world may at one time suit the growers but not be always the case. If at all the stakeholders agree to this, on approach of the opportune moment fact is shifted to other interest.
The point being stressed here is that in this country test "ethics", co-operation and vital interest of the economy and country. Heated arguments raging today are whether country gifted by God is poor or the people bent upon keeping it raw material supplier of the so called developed "WORLD".
TEX CITY WILL PROVIDE JOBS TO THOUSAND PROVIDED
Textile City, Garment City and like projects were afloat years back. The idea was to provide jobs to vagabonds around prospective industries. The fact speaks loudly the rovers around the mills have never gone to schools and training centres. The local industries just employ vanderers, put to work taking for granted in due course pick up to produce. Intelligent vanderers produce products for two square meals facilitating employers to keep cost of doing business with export edge.
Very lately some garment manufacturers and exporters have established training centre, besides Jica is turning manufacturers to train infusing idea to gain edge over regional rivals. Very lately the EU has taken upon itself to train unskilled workers so that products are readily braced by the importers. However, the resounding calls being given about the textile city to be based on 800 plots covering all ancillary units of the textile industry. It was further detailed city will have 250MW electric supply and ensure 20 million gallons water supply per day. The city will have one window operation utility supply, treatment plant and other facilities.
Thus far, reaching up this stage taken years, how long more will be required will have to be waited. The past experience of Kalabagh dam is vexing.
EXPLORE GAMBIAN POTENTIAL MARKET
Over a decade back, exporters of value-added products were particular about seeking Pak diplomats in countries with prospects of absorbing exportable there. Call given by Consul General in Gambia for exploring potential littered Gambian markets. The CG has not enumerated products like textile or sports goods or the surgical goods. He has, however, emphasised that Gambia is one of the most stable country and trade ties will yield the desired result.
One another very spectacular hint was also given not by any Pak diplomat but a textile exporter who sent encouraging message to his counterparts back in Pakistan to rush with products he had considered for sale like hot cakes in Ukraine, what the call yielded was quite on the front till today. Unfortunately, Pak exporters are always facing high cost of doing business and have shown allergy against exploring new markets or so to say small countries where prospect go to those who try their luck. Pakistanis have examples of China, which reaches small and not spectacular markets but produces products to suit-pockets of the country. The attitude has been abhorred by the business-related people who warned that unless Pakistani people don't change the whimsical desire to heat trade deficit wouldn't ever be so.
LAMY SEES PARALYSIS IN GLOBAL TRADE TALKS
Be it WTO Chief Pascal Lamy or the world powers, who are out to show the poor they can only talk about a sprightly smile on their lips not seen since centuries. With heavy heart, as if continued failure to ink a final deal has been his personal deprivations castigated in a recent statement that 153 WTO members so far failing to agree water down global trade by December 2011. He called for "an adult conversation" over what to do next.
Unfortunately such shrieks from chief of a world organisation have not been for the first time. The WTO members, who are supposedly, best brain, truing to salvage a deal from decade of fruitless talks on Doha Development Agenda, which at the end of the tunnel possessed the desired glow. Lamy, perhaps to infuse false expectation among poor longing for faint gleam of excitement, a necessary demand in their life. The WTO members hoped to work out a smaller deal in time for a ministerial meeting in December, but, they could not even agree on that because many countries, including US and China wanted on LDC-plus deal with some extra elements through in.
He detailed the LDC-plus package as we framed in May is not taking shape as he would have wishes. The US ambassador stepped in to communicate that the only way a deal could have been done was if "all major players were ready to make meaningful contribution". He said as we feared, participants have proven much more comfortable in talking about what others can give than in talking about what they can contribute themselves. How about listening to Chinese envoy who said if WTO failed to reach any of LDC deal by December, WTO credibility would be compromised.