Cotton prices consolidate at peak levels

Traders said in Karachi that domestic as well as the global cotton prices are generally being held tightly despite the approaching holiday period in Pakistan due to the birthday of Quaid-e-Azam Mohammed Ali Jinnah on the 25th December 2017, which also coincides with the Christmas. We are thus nearing an extended weekend holiday period after the next couple of days.
Thus on Thursday the seedcotton (Kapas/Phutti) prices in Sindh are said to have ranged from Rs 2800 to Rs 3500 per 40 Kgs, which is the same price range in which the Punjab seedcotton prices obtained, according to the quality.
Lint prices in Sindh are said to have ranged from Rs 6300 to Rs 7500 per maund (37.32 Kgs), according to quality, while in the Punjab they reportedly ranged from Rs 6400 to Rs 7500 per maund in a taut market
Fears have been expressed that shipments of Indian cottons bought by Pakistani spinners may not be shipped which had been bought at cheaper rates. The increase in the value of the American dollar recently may make shipments to Pakistan difficult. Brokers in Karachi added, however, that Chinese styles were comparatively weaker at present and also believed to be under pressure.
During the current season, (August 2017/July 2018), Pakistan may produce around 11 to 11.5 million bales (155 Kgs) of cotton. Domestic mills need anywhere from 14 to 14.5 million bales of cotton this season. Therefore, Pakistani mills need to import 2.5 to three million bales of cotton. Exporters may ship between 150,000 to 200,000 bales of cotton.
In ready sales of cotton reported on Thursday, 200 bales from Ahmadpur East in Punjab are said to have been sold at Rs 6900 per maund (37.32 Kgs), 800 bales from Jalalpur sold at Rs 7400 per maund, and 100 bales from Sadiqabad, 600 bales from Khanpur and 1000 bales from Rahimyar Khan all sold at Rs 7500 per maund in a fully tight market.
On the global economic and financial front, the outgoing calendar year (2017) will remain historically remarkable not only because our world has practically come out of a decade-long poor economic period following the Great Recession of 2007/2008, but also due to some other political and social events of historical proportions.
To name a few, the decision of Great Britain to opt out of the European Union is major political event. It is another matter that we are still entrapped with the so-called Brexit imbroglio, but such a situation may still resolve itself over the next four or five years.
Another problem is the regional election today called by Spain following a controversial independence referendum which may determine if the Catalonia pro-independence parties would carry the day against those who desire the region to stay as a semi-autonomous part of Spain. Analysts are predicting a very close result in the election.
Another global presumption is the widespread fear that Chinese economy is riddled with overextended bank loans which have been extensively provided to business entities who may not be able to repay their liabilities. These fears often come close to rattling the global economy but no concrete sign or signal has emerged that the Chinese economy is so weak as to crumble under the weight of large-scale extension of banking loans.
In another news concerning China, the European Union is reported to have introduced new rules during this midweek against what it calls ":excessively cheap imports from China which exerts a decisive influence over the allocation of resources, such as land or capital, and influences prices of various factors of production in a very significant manner".
In the Unites States, economic growth is proceeding steadily. In the meantime, President Trump has achieved his aim by persuading the U.S. Congress to pass "the largest tax cut" to spur business activity. Moreover, recent reports indicate that the U.S. job growth has been stronger than expected. These developments show that the Republican legislators joined President Trump to obtain their biggest achievement of 2017 by overhauling the U.S. Tax system positively which is the biggest change in taxation over the past thirty years, aiming to make America great again.
Despite some radical socio economic political and financial shakeup on a global basis over the recent year, the global economy still appears to be resilient enough to carry a hope to restore all the losses it has suffered over the past decade.