Cotton trading remains moderate, spot rate cut by Rs100; prices in ready move in close range

Trading on cotton proved moderate as daily off take remained on low side. Prices in ready moved in close range. Spot rate was slashed to Rs 5,500, the rate which ruled until week's end on February 25, 2012.
WORLD SCENARIO
Cotton futures currently keeping 90-80 cents a pound level. As cotton settled higher, rate stay at 90 and when streaming down touches 80 and below. When futures reached over $2 level at this time 2011, surge began from ruling around 60 cents a pound. The experts are, however, divided over cotton level may surprise analysts where it will finally halt. As far as demand and consumption is concerned softening economic plight speaks caution.
India and Pakistan have been facing scenario change. India not far back were calling for exports orders, but the other day it imported from this country. However, Pakistan is well placed, with nearly 14 million bales or equal to the level of 2008. This situation has brought buyers and sellers face to face for better gains. Consumers are pressing sellers to trade with the flow of phutti arrival which is fast. But sellers are not in a hurry to oblige. They are perhaps waiting for cotton exporters to come aiding price rise.
China is watching world to lay hands as soon as prices dwindle. Australia, Africa and Turkmenistan who grow cotton to export are on watch where orders for immediate delivery is coming.
on Tuesday most US cotton futures settled higher, rallying with other commodities, especially crude oil, and euro as investors found relief from European officials' agreement to a debt bailout deal for Greece. New benchmark May futures on ICE Futures US closed at 92.97 per lb, up 0.32 cent. Despite the buying interest, May futures established an inside range for the day, meaning a higher low and a lower high, moving from 92.46 to 93.79. The session low continued to hold within the parameters of an uptrend line that began at the December 14 bottom at 84.23. May volume came to a robust 12,719 lots shortly after the exchange session finished. March cotton edged lower heading into the close, finishing down 0.20 cent at 91.25 cents per lb. It was the lowest close since February 10.
On Wednesday, the US cotton prices finished sharply lower, driven down by demand worries evoked by weak economic data in Europe and China that cast a shadow on global growth prospects. New benchmark May futures on ICE Futures US ended at 90.53 per lb, a 2.44 cent and 2.62 percent drop. It moved to its lowest level since December 29 at 90.45 from 93.45. May volume jumped to 18,276 lots shortly after the exchange session finished. March cotton also plummeted, settling at 88.57 cents, down 2.68 cents, or 2.94 percent, per lb. It was the lowest close since December 27. The range ran from 88.50 to 91.65 per lb. Volume was 5,356 in late business, a light tally ahead of the delivery period which begins on Thursday.
On Thursday the US cotton prices fell for a second day in the benchmark May contract on talk that China, the world's biggest buyer, may exit the market for a while. Benchmark May futures on ICE Futures US ended at 89.23 cents per lb, falling 1.30 cents or 1.44 percent. It moved to its lowest level since December 28 at 89.01 cents from a session high at 91.15 cents a lb. May volume came to 13,958 lots in late trade. March cotton settled at 87.48 cents, down 1.09 cents, or 1.23 percent. It was the lowest level since December 27. The range ran from 87.46 to 88.85 per lb.
On Friday the US cotton prices rallied, reversing heavy losses in the previous two sessions, as mills and some foreign buyers found price levels attractive for purchases. Benchmark May futures on ICE Futures US closed at 90.15 cents per lb, rising 0.92 cents, or 1.03 percent. The range spanned 89.02 to 90.72, after dropping on Thursday to its lowest level since December 28 at 89.01 cents. May volume came to a light 7,863 lots in late trade. March cotton surged to finish at 89.85 cents, a 2.37 cent, or 2.71 percent, gain. It rallied to a high at 90.11, a day after falling to its lowest level since December 27 at 87.46. Friday's low was 88.22 per lb. Volume was exceptionally light at 146 lots, but Thursday was the contract's first day of deliveries.
LOCAL TRADING
Falling demand for cotton led to cut in spot rate by Rs 100 to Rs 5,500 per maund. Seedcotton prices in Sindh ruled at Rs 1800 and Rs 2300, while in Punjab they ruled at Rs 2200 and Rs 2650. In ready 5000 bales of cotton changed hands at Rs 5100 and Rs 5800 low buying was attributed to perception that prices were on way to ease further. However, exporters return to market was bound to effect scenario change.
On Tuesday no change was marked in outlook on cotton market, as buyers remain sidelined as sellers relaxed position but buyers disappointed them for the day as they lifted just 5000 bales at Rs 3950 and Rs 5800 per maund. Spot rate stayed put at Rs 5500 while phutti sold in Sindh at Rs 1800 and Rs 2300 and in Punjab at Rs 2200 and Rs 2650. The sellers have shown changed attitude though slightly over higher production level but this time buyers were being world falling rate. Whether sellers relax position further or buyers, who have watched world rates coming down through the week.
On Wednesday trading dipped or buyers desired further slimming in the wake of better arrival and falling world rate. The official spot rate was left unchanged while phutti prices in Sindh were quoted at Rs 1800 and Rs 2300 while in Punjab phutti sold at Rs 2200 and Rs 2650. In ready some 4000 bales of cotton changed hands aat Rs 5200 and Rs 5800. Cotton exporters were also away despite acceptable prices.
On Thursday spot rate was maintained at overnight level, phutti in Sindh ruled at R 1800 and Rs 2300 while in Punjab at Rs 2200 and Rs 2650. Buyers lifted 5000 bales of cotton at Rs 4100 and Rs 5800, sellers were holding prices in their view which favoured consumers but neither exporters nor the textile millers were showing enthusiasm. However some background scene was talked by textile ministry which lamented textile exports were slimming.
On Friday daily-intake by mills and spinners improved as the ginners cut down the asking prices of fine type mainly because of huge quantity of unsold stock. The official spot rate was unchanged at Rs 5,500. Seedcotton prices in Sindh were at Rs 1800-2300 and in the Punjab at Rs 2200-2650. In ready dealings approximately 9000 bales of cotton changed hands at Rs 4300-5700.
On Saturday official spot rate was unchanged at Rs 5,500. Prices of seedcotton in Sindh were at Rs 1800-2300 and in the Punjab at Rs 2200-2650. In ready dealings, approximately 3000 bales of cotton changed hands at Rs 4000-5700. Market sources said that mills showed no interest in buying in expectations of further decline in the rates.
EXEMPTION FROM PAYMENT UNDER EOBI ACT DESIRED
The textile industrialists looking for any scope sought exemption of payment from EOBI Act. Only authorities can peep deep into the problem why textile industrialists are so desperate.
The fact that shortages of gas electricity and faced with input cost which recorded abnormal rise is known to one and all. But the way textile manufacturers and exporters are showing their desperate feelings never before was experienced. The authorities on one or the other ground have for months been failing to meet the requirements in order to furnish maximum to the kitty.
Expressing textile industrialists their inability in letter to the textile ministry, value added textile forum (VATF) sought exemption from payment under EOBI act due to persistent financial crisis.
VATF chairman Rana Mushtaq Khan said that previously it was mandatory for every commercial industrial and other organisation employing 10 workers to pay financial contribution under EOBI Act but now every employer had to contribute if it had five or more employees.
He pointed out now payment was increasingly difficult due to rise in cost of energy, with frequent load shedding had become difficult for the textile sector to honour payment. Finally be requested government to exempt textile sector from paying contributions. He said government was empowered to do so under section 46 of the Act.
EXPORTERS DUTY DRAWBACK CLAIMS
The exporters particularly of textile products perhaps never get duty drawback unless authorities are sought to remind fresh exports are suffering. In a report collector customs has shown concern saying funds will be released soon to clear duty draw back claims filed.
What are the constraints is known to all of us. Only God cam help overcome bruises caused to his potential gift of Pak land. Enormous, resource of streaming down gashing water by India is heedlessly allowed to fall into sea-lap. Unknown meetings and conferences where potential of taming gushing water discussed proved waste of time and even burden on beggarly kitty. With such niggardly financial background there is no wonder thousands of capable ones enjoy facilities, but bother to honour obligation.
The default if one can so say, is more deliberate than under compulsion. Seizing an opportunity, like addressing a gathering to make sufferers believe the claim was around. The textile exporters loud calls for payment of claims continually are for heeding and obliging them to deliver to economy and prosperity. Those who have been looking for refund claims be have the promise must materialise soon.
Disappointments that have a long list through decades have not only harmed exporters but country's economy and prosperity. Earlier the truth is accepted, better for all exporters and exchequer alike, sources said.
GINNERS THREAT TO DISCARD TWO VARIETIES OF COTTON
If Ginners keep their threat to disown when the recommended two varieties of cotton are grown and marketed the loss under the circumstances growers will suffer is understandable. The reason they have extended has all along unwelcome such as low micronaire. According to relevant sources yarn and textile importers dropped standing request for avoiding exports of products prepared from short staple length.
In a hurriedly called press conference Chairman Amanullah Qureshi held out threat that ginners won't purchase cotton of new cotton varieties evolved and approved by Punjab Seed Council. The ginners also appealed to the farmers not to make mistake of sowing cotton varieties ginners have rejected what the ginners have in view is loss of markets once our products are manufactured with low staple fibre.
Market sources the said EU package for Pakistan by TWO council for trade in goods would boost export orders for yarn and fabrics. The ginners presume coming days are bound to ensure fair return to growers. The authorities should man research institution with talented scientists to evolve long staple cotton or should approach right place for right seed. The Bt cottonseed are available and availed by India and China by doubling yield. In Pakistan sources regretted neither could Bt cotton or like kind evolved nor even buy from genuine stockists. Government should correct the situation not to lose markets.
PUNAB TEXTILE INDUSTRY FACING TOTAL DISASTER
The textile industry in Punjab has for some time complaining about discrimination and scheduled and unscheduled gas and power disruption. Now they are afraid industry is on the verge of collapse. The APTMA chief Ahsan Bashir said on account of various factors the industry is unable to meet the deadline of export orders.
He pointed out industry has suffered exports to the tune of 34-35 percent in December 2011. And he said there seems no respite and further loss of $300 million per month in second half of 2012 due to non-availability of energy to the export oriented textile industry. Giving an account of the gradually deteriorated treatment independent and grouped feeders in Punjab is being subjected to eight to 10 hours a day unannounced loadshedding against the four hours a day as announced.
Explaining position he said textile mills are timely paying utility bills to Discos with maximum line losses and 24/7 power requirement. After giving details industry conditions industrial unrest is on the rise as the energy managers are shutting down 132KVA lines for textile industry in Punjab. The authorities should look deeply into the vividly narrated accounts and create scope to do away the crisis.