Meager sales on cotton market

Few sales on the ready cotton market were reported on Thursday. Even though the domestic spinners are reported to be doing well, it appears that many mills have already purchased cotton through imports as there were reports of a lower cotton crop (August 2017/July 2018) already floating earlier in the season.
Till Thursday evening, 1000 bales of outgoing crop (2017/2018) from Sindh were said to have been sold in Shahdadpur at Rs 7200 per maund (37.33 Kgs). In the new crop (August 2018/July 2019), 600 bales from Punjab reportedly sold from Rs 8250 to Rs 8300 per maund.
Till now, Sindh cotton from the forthcoming crop (2018/2019) has been facing some quality problems due to pre-monsoon rains, while the Punjab cotton is of good quality. Already about 10,000 bales (155 kgs) from the incoming crop (2018/2019) have been pressed by the ginners.
It is expected that the monsoon rains will continue during the forthcoming weeks which should be, under normal circumstances, helpful to improve both the quality and production of the new crop (2018/2019).
At present, it is being projected that the forthcoming cotton crop (August 2018/July 2019) could produce nearly 12.5 million bales (155 Kgs) on an ex-gin basis under normal circumstances. Sindh cotton crop may produce less cotton during the new crop (2018/2019) but Punjab province is presently projected to produce more cotton with good quality. Earlier during the season (2018/2019), sowing was less in Sindh province due to weather problems.
From the old crop (2017/2018) remnants, only about 40,000 bales of cotton are reportedly lying unsold with the ginners.
There are also reports in the market that due to tariff problems between China and America, China could buy cotton from Pakistan.
Seed cotton (Kapas/Phutti) from the forthcoming season (August 2018/July 2019) from Sindh is said to be selling from Rs 3800 to Rs 3900 per 40 Kgs, while in the Punjab the seed cotton was selling from Rs 3500 to Rs 4000 per 40 Kgs, according to the quality.
On the global economic and financial front, despite the ups and downs in the equity and some other markets, the fear of an increasing trade war between America and China is rising. Since the beginning of this calendar year, not only America and China slammed stiff import tariffs between them, other regions and countries have also imposed import tariffs likewise. Thus we may now even assume that the risk of trade war is not only increasing around the world but that we are already in the thick of a global trade war already.
Thus traders, investors and industrialists around the world are very worried that this state of affairs concerning the imposition of stiff trade tariffs has gone viral around the globe. The appearance of strong economies in America, the European Union, the United Kingdom or France is ephemeral.
Under these circumstances, we must worry about a full blown global recession which may not be too far behind. Analysts have already pointed out that America has not only imposed tough tariffs on China, but these tariffs go beyond China into the European Union, Mexico and Canada who have retaliated likewise and slammed counter - tariffs on American goods being imported into their countries.
The business communities in several countries have already become depressive on the approaching of a full-blown trade war now expanding to different corners of the world.
Some leading equity bourses around the world are becoming increasingly fearful. Of course the present tariffs on imports into America may be just a beginning, but a developing tit-for-tat scenario could compel a number of countries around the world to think twice before investing in America or purchasing American goods.
Recent tax cuts in America have no doubt provided incentives to trade and industry in America, but imposing heavy tariffs on imports from other countries could well be counter-productive in the long run.
Moreover, a recent report from America has shown that the United States economy has slowed down appreciably during the first quarter of 2018. Consumer spending in this period is reported to be the weakest since the last five years. Besides the impending problems in the global economy, the problems of immigrants in Europe, America and in Myanmar are only adding to worldly woes. Thus the state of the global economy is under a threat.