Patchy trading was marked on the cotton market during the week ended on May 23, 2004, a natural corollary of world rates retreating without any hold, relevant sources said.
The local buyers opted for not buying to press for drastic cut, but sellers had their own perception until Friday. The spot rate remained pegged at Rs 3000 without Sales Tax (15 percent) and upcountry expenses. On Saturday spot gained Rs 25 to Rs 3025.
WORLD SCENARIO: Option and speculative sales persisted in New York trading resulting in sharp retreat in futures. July losing 1.21 cents and December shedding 2.09 cents a pound. More land for sowing and reduced consumption was seen for the softness.
The first day's trading closed with losses on modest trade and speculative sales, with most players warily monitoring news that robust economic growth in top buyer China may soon slow down.
The market wanted more clarification from a slow of news reports that rampant growth in China's economy could soon give way. On Tuesday futures were bombarded by steady round of speculative sales to settle softer with follow-through pressure seen dragging the market down further.
Weakness in soyabeans and corn futures in Chicago likely added to the pressure felt in cotton futures, analysts said. Traders took note of weekly USDA crop futures, analysts said.
Traders took note of weekly USDA crop progress report where the govt said 60 percent of the US cotton had been planted compared with 53 percent at this time last year. Only day futures rose was on Wednesday as fibre contracts banked on trade buying to erase the early losses sustained by the market. Reaction to the USDA weekly export sales was muted.
The USDA said combined US net upland cotton sales at 152,900 running bales against trade belief it would range from 130,000 to 200,000 bales. Shipments list 188,700 RBs sharply below expectations.
The week-end trading saw no change in the trend as option related selling brought futures down. A broker said it was getting drier in Texas. If weather problems hit the crop here, there was no premium in the December contact to reflect that. Analysts said they will be looking toward the weekly USDA export sales next week.
LOCAL TRADING: The trading in cotton took to slow going on usual so-called tug of war between the sellers and buyers remained trenched throughout of the week. Sales were limited to a few bales, which were difficult to be fixed when actually they took place.
However, one thing was crystal clear that known bales that changed hands were not more than 10,000 bales compared with over 800,000 bales still stuck up at the ginneries.
While the buyers are not worried as they can drain out foreign exchange to buy required quantity of cotton, the ginners have been very much worried. The official rate remained at Rs 3000 until Friday, but bargain was evident as ready sales sometimes dipped to unexpected level.
Some 2000 bales of cotton was reported on the first day at respectable prices of Rs 2900 and Rs 3150. Trading pattern was next to impossible to be predicted.
The adamant ginners who despite huge stocks from today's point of view have been reluctant to give indication of a relaxed attitude.
The spot was at Rs 3000 and no deal was formally report no deal was offered on the fourth day as the spot rate remained stuck up Rs 3000.
The futures decline in New York was not apparently touching spot in Pakistan. On Thursday, spot was put at Rs 3000 and sources did not pass on any deal.
Ginners apparently had put spinners in double mind how to deal with the situation. A few deals were struck, though dealers were not upbeat good trading was likely.
The spinners had been exploring new markets to fill the gap in their needs and export orders.
The price of a deal obviously not a premium one was done at Rs 2700 per mound from Sindh, Punjab came as much down as to Rs 2900. On Friday deserted took was reported by the traders.
The continuously thinning price in New York was not influencing the ginners who left spot rate unexercised and unchanged at Rs 3000. Saturday's: Higher prices made spinners reluctant to buy. However, DMR said spot was raised by Rs 25 to Rs 3025.
SERIOUS ALLEGATIONS: The PPWSMA has alleged that local industry is facing closure and unemployment, and on top of allegation is that several presentations were made understandably with the relevant authorities but to no avail.
The problems pointed out should be booked in to as the victims are not supposedly dragging adversaries without being hurt by them. The Pakistan Polypropylene Woven Sacks Manufacturers Association claims that PP woven sacks production is over capacity. It regretted why PP woven sacks imports should be allowed.
The association, however, has not given comparative cost that consumers of local sacks and imported sacks are paying. Authorities have to check locally manufactured goods prices to be competitive.
It alleged that SRO 410 was being grossly misused and importers were indulging in mis-declaration of quantity by showing extra-ordinary requirement of PP sacks.
That same item being produced in EPZ all find outlet in Pakistan, though 80 percent products are supposed to be exported.
Similarly it also alleged that PP granules imported for Afghanistan is sold in Pakistan during so-called transit.
The allegations are many more but the silence of authorities in redressing the grievances of the victims is incomprehensible. Or, authorities should come out with the fact that is dubbed by the manufactures as negative response.
How much industry has invested is not given. The amount, whatever the same be should not be allowed to be drained out if it can!
(Incidentally local requirement has not been mentioned in the better sent to CBR Chairman).
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