Trading remains mostly subdued on cotton market owing to players' wait and see mood

Trading in cotton was mostly subdued as sellers attitude remaining tough to keep prices strictly in line with the global trend. The spot rate was Rs 12,500 right from opening.
WORLD SCENARIO:
The much awaited USDA planting report on 31st March took away heat at cotton sowing subdued at 12.566 hectares, was unlikely to quell two-year rally, noted players said. The second thought was given as la Nina was expected to lint Texas, which produces maximum cotton in the US. The cut has been almost half of expected higher figure, market players are awaiting now USDA monthly supply demand report with particular attention to any adjustment in consumption and stock levels.
The Chinese policy to start reserve of cotton, temporary though, will push prices high. The stockpile will start from September 1, 2011 to March 31, 2012. India exporters may face pressure in exports, as government has withdrawn facility. The consumption Indians enjoy is up to 31.6 million bales level. Unless some wrong is seen with weather ahead, production is marked at 33 million bales.
Pakistan took relief sigh when Uzbekistan offered nearly one million bales at easy terms. The revelation that some producers have started using bamboo fiber to escape surge. Adding value to bamboo fiber is somewhat cumbersome but the user had all praise.
On Monday the US cotton futures closed flat as investors awaited a supply/demand report from the US Department of Agriculture, but new-crop contracts rose three percent on buying related to spreads. The key May cotton contract on ICE Futures US ended unchanged at $1.9555 per lb, dealing from $1.9221 to $1.9649. Last week, cotton fell 4.4 percent. About 60 to 70 percent of the day's volume was related to spread trading between May and December as well as between July and December, Stevens said. Volume traded in the cotton market totalled around 17,000 lots, about one-third under the 30-day norm and sharply below Friday's level, Thomson Reuters preliminary data showed. Volume traded on Friday reached 27,789 lots, ICE Futures US data showed.
On Tuesday the benchmark US cotton futures ended up 2.8 percent, on position juggling in heavy, indecisive trade before the release of a government crop report at the end of the week. The key May cotton contract on ICE Futures US increased 5.51 cents to close at $2.0106 per lb, having ranged from down the seven-cent limit down at $1.8885 to up the daily limit at $2,0255. The new-crop December cotton contract gained 1.67 cents to end at $1.3776. Total volume traded in the cotton market was around 41,500 lots, over two-thirds above the 30-day norm, Thomson Reuters preliminary data showed. The first estimates for the 2011/12 cotton season will be released by the USDA in its May production report.
On Wednesday the US cotton futures finished up the daily maximum on investor and speculator short-covering, as players awaited release of a government crop report at the end of the week. The key May cotton contract on ICE Futures US rose the seven-cent limit to end at $2.0806 per lb, with the session low at $1.9934. The new-crop December cotton contract gained 4.21 cents to end at $1.4197. Total volume traded in the cotton market was around 30,000 lots, about 30 percent above the 30-day norm, Thomson Reuters preliminary data showed. Open interest was 195,689 lots as of April 5, the highest in 8-1/2 weeks, according to ICE Futures US figures.
On Thursday the US cotton futures ended mixed, with the front-month May contract recoiling from an intraday limit-up peak, as index fund rollovers heated up and traders readied for a government crop report on Friday. The key May cotton contract on ICE Futures US peaked at its seven-cent limit at $2.1506 per lb, before selling off in the last hour of business to end with a 0.16-cent gain, at $2.0822. Market players attributed the late-session volatility in the May contract to increased index fund rollover business, as funds rolled out of May into July, with first notice day for May cotton just two weeks away. After the close, ICE Futures. The new-crop December cotton contract tumbled 4.03 cents to end at $1.3794. Trading volumes were brisk, with more than 43,600 lots traded by 3:30 pm EDT 1930 GMT, more than 80 percent above the 30-day norm, Thomson Reuters preliminary data showed. Open interest in cotton futures continued to creep higher, rising 3,469 lots to an eight-week high at 199,158 lots, as of April 6, according to ICE Futures US figures.
On Friday the US cotton futures lost 2.5 percent of the value by the close as price momentum stalled following a near 30-cent rally in front of the government's final estimate of 2010/2011 crop. The US Department of Agriculture's monthly supply/demand report cut the estimate of the US cotton crop by 215,000 (480-lb) bales to 18.1 million bales, while raising domestic consumption by 100,000 bales. The key May cotton contract on ICE Futures US tumbled 5.25 cents or 2.5 percent to settle at $2.0297 per lb, near the lower half of its $2.0125 to $2.1240 session range. Dealers cited profit-taking from the near 30-cent run-up in prices this week. The new-crop December cotton contract edged up 0.14 cent to $1.3808. Total volume traded in the cotton market was around 27,700 lots, about 16 percent above the 30-day norm, Thomson Reuters preliminary data showed.
DOMESTIC TRADING:
The opening day on the cotton market saw trading in low profile, as buyers expected some favourable downturn in cotton prices owing to some grace by authorities, however, inert conditions also prevailed as spot rate, seed cotton prices stayed put at Rs 12500 and Rs 4000 and Rs 5000, respectively. There was no buying activity as change in seller's attitude was eagerly awaited. The fortnightly report regarding arrival till March end at 11.6 million bales, lower than last year's at this juncture.
On Tuesday, second day running no trading in cotton was witnessed as mills remained on the sideline due to strike. The spot and phutti prices again stayed inert. In the meantime market operators informed that new sowing has started in some places. They pointed out that cotton production would be around 15 million bales following the signal of the authorities.
The authorities stated earlier that cotton import should be stopped and damage from floods or pest and viral attacks should be kept in control though research and immediate attendance to any disease and damages.
On Wednesday there was not much change in cotton trading outlook was witnessed on the third day of the week where thereby one deal was concluded said to be under local and global trend. The spot rate was unchanged at Rs 12500, while phutti rates were shown ruling at the previous day's level. The consumers are keeping low profile and buying only when they needed for feeding the hungry mills. The government has understandably given some relief in ST but sellers of cotton are reluctant to share with the buyers. Total deal, rather bulky sort, was merely 400 bales costing Rs 11,600.
On Thursday again trading slumped, as spot rate and seed cotton prices stayed put. However, nearly 16000 bales of cotton were lifted by needy consumers. The sales were marked at Rs 11600 and Rs 11900. The ginners mindful the quantity of stock they have in their inventory will be sold out at good price.
On Friday in the absence of fresh leads, wait-and-see mood was adopted by both buyers and sellers during the slow business. Official spot rate was steady at Rs 12,500. In Sindh and Punjab phutti price of low type was at Rs 4000 and superior type also unchanged at Rs 5000. In ready business nearly 1300 bales changed hands between Rs 12000-12300.
On Saturday slow trading was seen on the cotton market, as mills are still double minded due to rising asking prices by the ginners. Spot rate was steady at Rs 12,500. In Sindh and Punjab phutti price of low type was at Rs 4000 and superior type also unchanged at Rs 5000. In ready business nearly 1500 bales changed hands between Rs 11500-12500.
NO NEED MOURNING FIRST FTA, TIGHTEN BELT FOR 2ND:
The first free trade agreement (FTA) with friendly China had yielded merely frustration that could have been attended at the earliest, as the two-way trade yielded dollar four billion, the share Pak claimed was just dollar one billion. The second FTA should have progressed ahead seemed to have hanging in balance.
Knowledgeable sources surprised and non-plussed question authorities to be so unconcerned to let losses trickle down the begging bowl. The loss sustained during the first FTA worked no more than to call for China to relax its banking rules, China, which enjoyed the bulk of gain during the first FTA asked Pakistan to improve a number of relevant projects putting hindrance in smooth flow of two-way trade goods.
A deeper look fathomed those Pak authorities just bothered to arrange proper machinery. The Karakoram highway, which could lay golden eggs, lies un-operative. Pak authorities were just to sewing over to employ Chinese help for reconstruction of flood damaged highways and agriculture sectors. Even that promise, as victims of Pak indifference, where is agriculture technology development zones? The fact will have to sifted through indexes.
PAD ADVICE TO COTTON GROWERS:
The president recently indulged in advice to cotton growers - raise the size up to 15m bales. What such advice constitutes carry a few related matters like ploughed land, certified seeds, water, fertiliser, inputs etc. The small growers are in large number who invests their sweat and blood, days rest and nights sleep. The small growers needs are never in view, while giving a loud call for grow more cotton. Those who own big price of land, employ some one to grow for them can manage money and rest of the inputs.
Such big ones should pay heed to call from consumers or the authorities, and guide in matter of time, weather and right seeds and fertiliser.
The small growers will go all out fully equipped with required inputs. Unlike the big ones who get land ploughed only as much to ensure food for family and the rest for sales to gather money for social formalities. Those who give call for grow more cotton generally fight shy to see farmers in search of a buyer. The growers are aware of growing time but for their guidance agri-department also sends caution note. The Punjab Agri Dept wants growers to go for sowing right now particularly the traditional one. However, BT cotton, if seed is pure, should be sown for turning outright exporter of cotton.
WORLD CUP 2011 CALL FROM BD AFTER INDIA'S
Hon. Consul General of BD in Punjab gave a hearty call to Pak traders and investors that there were vast opportunities to invest in yarn and garments sectors, which they can take advantage of the BD High Commissioner present there was amply appreciative of consul general for organising function in Lahore and hoped the occasion will allure traders and investors to visit BD to enhance business and trade ties, while businessmen from that country explore possibilities in Pakistan.
Whether or not any high level attempt was ever made since one country splintered to keep business going, jute was one stuff could be heard in wholesale markets, besides cotton and yarn.
However, the very touching story was in the BD function report that Pakistan - West Indies match won by Pakistan drew applauds by Bangladeshi viewers. The consul general made glowing reference that the hearty BD viewers 2011 World Cup were expression of desire for more interactions. He aid this should be encouraged by both the governments.
He said textile fabric manufacturing and garment sectors were offering Pak industrialists facilities for enhancement of trade and manufacturing opportunities in BD. He said BD garment exports have reached more than respectable size, which Pakistan reasonably may grudge. Pakistani should take advantage of the liberal offer. Indian manufacturers and exporters are reaping good harvest Pakistan too are understandably contributing to brothers in BD, but efforts to contact them failed. They were not found, on seat when call was made.
CAMERON'S PLEDGE FOR GREATER ACCESS TO PAK EXPORTERS
The British PM Cameroon landed here on April 5, on schedule, carrying a lot of hope and expectations for Pak textile exporters, besides feeling of friendship. Cameroon poor fellow is himself engaged in violent efforts to set economy on right track. The question, however is why Western leaderships are frequenting this ever-neglected country. The report about his arrival accompanies with about half a dozen factors including over one billion-dollar for education.
The EU package is rottening in WTO for two months, on perhaps a voice that is not of much relevance. The problem has been attended by Cameroon already once when he helped quell encumbrance making possible to forward package to WTO for a formal procedure. The more pragmatic however, approach seemed India where talks of coming "LOVE YEARS", opened on eve of World Cup 2011.
The world nations saw with conviction the ice thawing. Anyway that instant positive note that Cameroon pledged was to push the WTO to agree on emergency trade package for Pakistan in December 2010. The PM held out assurance that back in Europe, we will continue to be the strongest possible advocate for greater access to European Union markets, and press World Trade Organisation partners to reach agreement on the emergency package of trade measures by the EU. Let Pakistanis hope for the best!