Cotton prices fluctuate, business volume remains on lower side; much depends on import from India

Up and down conditions marked on the cotton market where spot rate state at Rs 9000 most of the time though in ready both ways movements were often seen.
INTERNATIONAL SCENARIO:
India was in news during the week, which seemed set to allow shipment of 2.5 million bales from January 11, 2011. China is weighing to order import of huge quantity, supplier getting ready to honour. African countries were returning to grow cotton as price reached all time high as analysts say had not seen since US civil war, latest is that some South American Soya growing countries have decided to reserve more acreage for cotton to gain from the rising price trend.
Australia, which lost some cotton crop due to bad weather in Queensland, is planning to grow more cotton. Australia exports cotton to needy countries like China. In Pakistan wave of happiness was apparent, as local cotton sellers were not showing any mercy.
They were following world trend, which is on the higher side. Very lately cotton showed easy trend in world markets because of long holidays on account of X'mas and new years holidays. Most of the big cotton traders had left their businesses and celebrated X'mas with family and onwards the Bettwide annual cotton conference, a routine observance by the cotton industry.
On Monday the US cotton futures finished lower on light follow-through investor sales and news of an interest rate rise in top consumer China. The market may see further choppy trade in the last trading week of 2010, as most large investors have already closed their books and will not return until after the New Year. The cotton market on ICE Futures US was closed last Friday for Christmas. The key March cotton contract dropped 2.36 cents to end at $1.4576 per lb on volume of around 13,000 lots, which is about half the 30-day average, Thomson Reuters preliminary data showed.
ON Tuesday the US cotton futures closed lower on light investor sales as the market remained trapped in a range, with many big investors expected to stay away for the rest of the year. The key March cotton contract on ICE Futures US fell 1.41 cents to finish at $1.4435 per lb, moving from $1.44 to $1.4949. Volume was seen at 7,000 lots, Thomson Reuters preliminary data showed. That would be just above the year low of 5,895 lots traded on June 25, according to exchange data.
Cotton is the third-best performer in the Reuters-Jefferies commodity index so far this year, up over 76 percent, as the market reached levels not seen since the US Civil War in the 19th century.
On Wednesday the US cotton futures finished lower for the second straight session on investor liquidation although the market managed to hold the lower end of its trading rang. The key March cotton contract on ICE Futures US declined 3.93 cents or 2.72 percent to finish at $1.4043 per lb, moving from $1.4038 to $1.4635. Volume was seen around 12,800 lots, about 50 percent below the 30-day norm, Thomson Reuters preliminary data showed.
The cotton market is one of the best performing commodities in the Reuters-Jefferies commodity index, up almost 75 percent year to date as the market rallied to hit levels that have not been seen since the US Civil War in the 19th century.
On Thursday the US cotton futures closed higher on speculative and possible mill buying as players adjusted positions one day before the end of a year in which prices charged to a 150-year high. The key March cotton contract on ICE Futures US rose 2.41 cents to finish at $1.4284 per lb, moving from $1.3755 to $1.4443. Volume was seen around 18,200 lots, about 20 percent below the 30-day norm of about 22,300 lots, Thomson Reuters preliminary data showed.
On Friday the US cotton futures settled an historic year 91.50 percent higher, with 1.38 percent rise contributing to their overall advance, as strong demand from top consumer China and investment funds nearly doubled prices. The key March cotton contract on ICE Futures US added 1.97 cents to close at $1.4481 per lb, and set a higher range that ran from $1.4353 to $1.4684 a lb. Volume, however, was exceptionally light at 5,421 lots. The cotton market came in, as the second best performing commodity in the Reuters-Jefferies commodity index, up over 80 percent in 2010 and just a shade behind silver. While cotton was off its peak of close to $1.60 a lb set on December 21, the outlook for 2011 remained bullish. Inventories were tight, China's consumption remains hot, and investment buyers viewed the fiber futures, as undervalued.
LOCAL TRADING:
Up and down was what remained on the cotton market where spot rate stayed most of the time at Rs 9000, while in ready prices moved both ways.
On Monday nominal business was marked on the cotton market where only 600 bales of cotton were lifted. The day was provincial holiday when low business was expected. But sellers attitude depicted that it was not due to holiday but price quoted forced buyers to adopt wait and see until next day. The sold cotton cost buyers between Rs 9000 and Rs 9300 phutti prices ruled in Sindh and Punjab at unchanged level at Rs 3900 and Rs 4200.
On Tuesday modest trading activity was marked where spot rate was unchanged at Rs 9000, phutti stayed at previous day's level at Rs 3900 and Rs 4200 in ready take off nearly 7000 bales changed hands, consumers paid price ranging from Rs 9000 to Rs 9400.
On Wednesday cotton prices stabilised though transaction was noted just modest. Spot rate was unchanged at Rs 9000, while nearly 13000 bales of cotton were lifted in price range of Rs 9000 and Rs 9400. Phutti prices in Sindh and Punjab stayed put at Rs 3900 and 4200. Sellers have been very calculative, so were the buyers who have patient to wait until things turn favourable. World cotton is beaming signal to buyers and sellers and both are sure condition will change in their favour. In world trading around a week's relaxation is expected due to X'mas and new year's day long holidays besides China, which is on the way to planning to place import orders.
On Thursday cotton prices showed firmness, as buyers were busy taking time when condition turn for better. In ready off take nearly 7000 bales were lifted between Rs 9000 and Rs 9400. Seed cotton in Sindh and Punjab ruled at Rs 3900 and Rs 4300. Market sources commented that situation was unlikely to change until mid January 2011. General perception, however, was that prices may not undergo favourable change for the consumers.
On Friday the Karachi Cotton Association (KCA) spot rate was enhanced at Rs 9100, they said. Seeds cotton prices in Sindh and Punjab moved up at Rs 3,900-4,400. Prices went up, as over 7,000 bales of cotton changed hand between Rs 9100-9500. Some dealers, who were on the sidelines, said that all most all trading centres were closed countrywide, as strike call given by the religious parties and was supported by the traders and transporters. The strike called to protest against any amendment in the blasphemy law.
On Saturday the Karachi Cotton Association (KCA) spot rate was given a fresh rise of Rs 100 to Rs 9200. Seed cotton prices in Sindh and Punjab were unmoved at Rs 3,900-4,400. Prices fluctuated slightly as only 1200 bales of cotton changed hand between Rs 9200-9500. Commenting on the slight dealings Naseem Usman said that wait-and-see prevailed on the market amid long holidays in the domistic and international markets. He said that the cotton traders and businessmen were hoping for positive developments in the coming days after the clearance of Indian strategy regarding exports of more cotton.
GAS SUPPLY RESUMED TO TEXTILE INDUSTRY
Textile industry in Punjab hugely in the absence of gas supply remaining suspended for 136 days cumulatively. After firm direction by the PM to SNGPL, it flouted the same. The chairman APTMA disgusted as he was, warned SNGPL authorities to take the issue to the public in case it failed to honour the joint understanding between the PM of Pakistan with Chief Minister of Punjab who had reacted strongly and termed it a conspiracy against the Punjab Government. This prompted the PM to call emergency meeting and instructed SNGPL authorities to ensure supply for five days a week. This instruction of the PM worked and gas supply was resumed on December 22, 2010. The industry leaders took a sigh of relief.
This country according knowledgeable circles has always imports more than exports despite immense potential. They suggested authorities responsible should improve inputs so that the country salvaged out of "imports only." Except early few years imports have exceeded exports. This is high time that practical steps are taken to change the scenario to ensure respectable existence. The industrialists in Punjab have expressed satisfaction over PM's steps, nevertheless, they fear heavy losses in case the government instruction failed to ensure equitable distribution of gas to the industry in Punjab.
BOOST TO PAK EXPORTS:
Let sympathetic core prevail on the powers who incidentally happen to be also long standing apparent friends to come to rescue in this hour of distress. The friends to know our hour of distress and their philanthropic and riches do push to boost Pak efforts to regain the glory that this country was created for. A dateline Lahore report headline beams Pak exports may get up to $3 billion boost.
The feeling has been aroused following the devastation left by floods which if could have been tamed to have rather proved roaring advantage. What however instantly hurt feeling that report is loud about telling the measure in "short term lifting of the trade restrictions against Pakistan.
The textile exporters seem to be appreciative of the friendly gestures as the noted exports have increased impressively since 2003 when the EU had enhanced duty free quota for textile exports, marking $10.3 billion by the end of 2010. As Pakistan aggressively sought some relief it has again secured relief from the EU waiving tariffs on certain textile products to last until 2013 or around which, however, is under review of the WTO. Since the EU has released with consent of the constituent states, WTO may OK it.
Besides this, Pakistan enjoys duty free status about $200 million worth of its exports, as a beneficiary of the US GSP system of preference. But the items are not textile products, Pakistan has hoped ROZs will soon be okayed by the US Senate. The knowledgeable sources recalled its neighbour whose friend supplied from pin to engine and technological expertise notwithstanding. Against this Pak friends have acted in a manner this country remains market for goods friends supply year after year. May Pak authorities start thinking positively.
HIGH COTTON PRICES LURE SOYABEAN FARMERS:
So far African farmers return to cotton was receiving special mention who had abandoned as they were non-plussed by EU and US subsidy to their cotton growers. Not many years but a year or two back some cotton growers switched over to some other better crop ensuring good return. Today newspapers have on their economic page displayed prominently South American soyabean farmers who switched over to cotton for higher gains. It would be wrong to claim only high prices are attracting farmers of other crop but ready market in China. India and China get tired by supplying but consumers in China keep looking where from to obtain required quantity of cotton. African countries supply cotton textile exporting countries.
Meanwhile, tight stocks and fund buying by investors who saw cotton as under-valued, stoked the commodity rise to a 150-year high last month, and the rally is spurring plantings. Soya expansion has been slowed in Brazil, while cotton production in Mato Grosso, which replaced around 150,000 hectares of intended soya acreage. Until stocks rebound cotton prices will remain strong and Brazilian and Argentine farmers will in all likelihood will continue to increase cotton acreage, but at a slower pace than they did this year. Crop agency in Brazil predicted cotton area would jump 44 percent to 1.2 million hectares and raised its output outlook to a record high of 1.84 million tonnes of lint up nearly 55 percent from past year. Brazil is world's No 5 cotton producer.