Sustained steady trend prevails on cotton market, as prices remain range-bound; spot rate higher by Rs 100

Trading in cotton sustained steady trend, as prices generally were range-bound, kept to low tone despite sympathetic attitude towards growers, as indicated from PM's statements. Spot rate began journey with Rs 6400 and ended at Rs 6500.
WORLD SCENARIO:
A couple of surge in New York cotton trading past week, as subject to speculative trading, stronger push from outside markets and indeed weaker dollar. A couple of weeks back analysts had predicted cotton that surged to dollar 2.197 will see burst in due course - nose diving to 70 cents and 60 cents a level where ballooning had begun. The world ranking economists and running world powers are constantly warning worsening days ahead. They lay fingers on Europe debt crisis, government and financial institutions struggling to bring to a halt.
The cotton dealers are now turning eyes to USDA report to have stronger grip on picture that will emerge in making cotton-growing state Texas faced with unprecedented drought and either side of Mississippi River hit by floods. Gold is only safe heaven, which is hitting peak on almost daily level. Oil has been left behind too, manifesting the world which way moving. Middle-East major oil supplier is facing uncertainties, Japan the bulging economy has lost its shine. As stated about those powerful hands out to set the recession trend is heeded to and firmly supported.
On Monday the NY cotton futures closed higher on follow-through speculative buying but trade sales in the options ring took the steam out of the market and knocked it back in late trade. The key December cotton contract on ICE Futures US rose 3.52 cents or by 3.5 percent to finish at $1.0404 per lb, trading from $1.0052 to the daily limit of $1.0552. Total volume traded hit over 12,700 lots, about 8.5 percent under the 30-day norm, Reuters data said.
On Tuesday the NY cotton futures finished slightly lower on sales by small investors in the thinnest trading volume since last summer. The key December cotton contract on ICE Futures US shed 0.19 cent to settle at $1.0385 per lb, trading from $1.0236 to $1.0424. Total turnover was a little over 6,500 lots, Thomson Reuters preliminary data showed. That would be half as much as Monday and the lowest since June 25, 2010, ICE Futures US data showed.
On Wednesday the US cotton futures settled up. Oil prices were firmer and gold prices steady after a two-day rally as the steadier tone of outside commodity markets gave some support to cotton. The key December cotton contract on ICE Futures US rose the four-cent limit or nearly four percent to finish at $1.0785 per lb, with the session low at $1.0288. Total volume traded hit over 18,100 lots, almost a third above the 30-day norm, Reuters data said. Total volume traded on Tuesday hit 7,113 lots, the lowest level of business since May 23, ICE data showed.
On Thursday the NY cotton futures ended lower due to investor sales sparked by global macroeconomic worries, but talk of crop problems in Pakistan and possibly top consumer China pared market losses. Jitters over Europe's debt crisis and a raft of weak US economic data triggered a rout in global equities and spurred investors to the perceived safety of gold and US government bonds. The key December cotton contract on ICE Futures US fell 0.87 cent to finish at $1.0695 per lb, moving from $1.0382 to $1.08. Trading volume totalled more than 14,000 lots, some 3.4 percent above the 30-day norm, Reuters data showed. Total volume traded on Wednesday hit 19,198 lots, up from the Tuesday level of 7,113 lots, which was the lowest level of business since May 23, ICE Futures US data showed.
On Friday the NY cotton futures finished easier on investor sales inspired by turmoil in outside markets, although worries over crop problems in several countries pared losses. European stocks slid while US stocks seesawed, with gold scaling record highs and other commodities climbing on the dollar's weakness. The key December cotton contract on ICE Futures US fell 0.73 cent to finish at $1.0622 per lb, moving from $1.0839 to $1.0513. On the week, the market was up almost one percent. Trading volume totalled more than 8,600 lots, over 50 percent below the 30-day norm, Reuters data showed. Total volume traded on Thursday hit 14,682 lots, up from the Tuesday level of 7,113 lots, which was the lowest level of business since May 23, ICE Futures US data showed.
LOCAL TRADING
On Monday business on cotton market was marked down due to quality factor caused by heavy downpour. The spot rate inch up at Rs 6,400. The seedcotton in Sindh was lower by Rs 100 to Rs 2600 and Rs 2700. In ready take off 3000 bales of cotton changed hands between Rs 6250 and Rs 6600. The government has accepted ginners demand to withdraw 3.5 percent withholding tax but cancellation report is awaited. The rains have stopped but Met office see more in offing.
On Tuesday mills buying improved on cotton market. Spot rate stayed put at Rs 6400. In ready take off 8000 bales of cotton were lifted in price range of Rs 6150 and Rs 6600. The seed cotton in Sindh ruled lower by Rs 100 to Rs 2500 and Rs 2600, while rate was also down in Punjab and quoted at Rs 2500 and Rs 2700. Buying lifted before Eid holidays. On Wednesday buying improved with prices going up as far of rains' ill effect gripped the buyers. However, realisation dawned that price will remain in check for the time being. The spot ginners maintained at the previous days level.
The cotton users lifted nearly 10,000 bales in prices between Rs 6150 and Rs 6700. Phutti in Sindh rose by Rs 100 to Rs 2600 and Rs 2700. In Punjab phutti rose by Rs 100 to Rs 200 to Rs 2600 and Rs 2900. The global price trend depicts steadiness. On Thursday some 7000 bales of cotton changed hands in trading as spot rate stayed put at Rs 6400. The lint sold between Rs 6200 and Rs 6700. Sindh seed cotton was unchanged, while in Punjab rate were Rs 2600 and Rs 2900. The spinners are unfailing buyers hoping price may turn to gain. The global market prices also depicting gradual dip.
On Friday strong mills' demand persisted amid market anticipation about rise in prices following the upward trend in the global market but some analysts were of the opinion that rate may drift lower due to thin attendance during the pre-Eid sessions. KCA official spot rate was raised by Rs 100 to Rs 6,500. In the ready business nearly 7,000 bales of cotton changed hands between Rs 6350-6800. The seedcotton in Sindh was higher at Rs 2700-2800 and rates in Punjab were also up at Rs 2700-2950.
On Saturday mills and spinners were busy in finalising news deals because rates were matching with their psychological level. KCA official spot rate was unchanged at Rs 6,500. In the ready business nearly 7,000 bales of cotton changed hands between Rs 6300-6650. The seed-cotton in Sindh was unchanged at Rs 2700-2800 and rates in Punjab were also same at Rs 2700-2950.
SURVIVAL, AMBITIOUS TARGET AT STAKE
The textile exporters are firm to make the textile year memorable but they say they are facing liquidity crunch. Will this "disqualification" be ever rules away from our businessmen and exporters? Perhaps never. The government and its institutions have never shown strength viability. The present government movement is perhaps slowest and the kitty emptier.
The export target at $25 billion has been fixed to give a good name to historic policy 2009-14 of ministry of Textile Industry. All these are preliminary: the purpose ahead is to talk the BD government the alone garment exporters, so that they can leave behind other countries despite quality and acceptability by the importers. The government released subsidies in billions so that gives lead. Pak exporters of textile products have already shown very recently despite so lamented high cost of doing business earned $14.1 billion much to the satisfaction of all-exporters themselves and authorities.
Now they have reasonable way of approaching government to respectfully impress the money owed by them and not being released by relevant department would good to pay pack and let exporters survive and kitty be oxygenated. For this they for the sake of reminding said it is imperative that huge amount of pending claims against drawback on local taxes and levies are paid to the exporters without the least delay.
LET TEX SECTORS SEE TO NATIONAL GAINS
The textile stakeholders when faced with crisis talk to market mechanism and fair play for solution. Have these two solutions not tried in the past. But solution was short lived and fall out left behind much more wanting. In these write ups "ethics" has been often suggested to attain long lasting gain. The suggested world, however, cannot be found in any look on economies.
Unfortunately not merely in businesses and exports market mechanism is talked although practice is not seen anywhere in this country. Even the world powers, who applied the most ardently suggested be the economists, at gaps of some decades is found utterly wanting. The world today is being warned by renowned economists and experts to take steps to keep facing economic recession.
What leads powerful nations after every 10, 20 and 30 years into mire? The textile sector has a history of wrong perception such as acquitting spinning mills and honour bound to rid with textile machinery manufacturing because the fashion changes and with that manufacturers give their customers the right type in demand. Not many months' back, textile value added gracefully received backing from Textile Ministry to get yarn at favourable rate and in required quantity. The result was record contributing to sick kitty. Now cotton prices which touched the peak at $2.27 from just 70 cents a found, nose-dived to just half, dumping textile stake holders into swampy land. A way is kitty desired - and effort is on.
FINALLY TCP BEING INDUCTED INTO HELP FARMERS, USERS
Abrupt surge and as abrupt giving in cotton prices rendered consumers nearly bewildered who looked right and left for some support. Last year in March global cotton futures soared to nearly a century old peak - $2.197 cents, which with the production reported from four corners as sufficient to cover consumer needs besides worsening condition is tsunami hit Japan and uncertainties in ME and elsewhere. The textile manufacturers and exporters hit hard by what they lament high cost of doing business were looking for a neutral buyers like TCP, which Punjab Agri Minister hopefully called upon the federal government to buy some three million bales expected to work as price stabiliser.
The lint prices have come down from over 2 dollar a pound to just half of it. The obvious result would be to that growers in Pakistan would feel encouraged to invest with open heart - around 15 million bales. The cotton consumers - spinners and textile manufacturers have in view the record export figure and have been asking growers to make available cotton around 16 million bales. Right at the moment TCP has tightened belt is not clear but the Prime Minister has been approached with the hope that he will go all out for doing away with the problem so that growers don't suffer at days's end.
KISSAN BOARD FIRM TO PROTECT GROWERS INTEREST
Is truth knocking conscience of Pakistan seemed resounding as Kissan Board declared it is determined to protect farmers from clutches of exploiters. In a recent search what needs Pakistan to take out of quagmire only one out many interviewed said "take to truth and see progress and prosperity of Pakistan. The ginners were out waging struggle against government with holding tax three percent, which ultimately link the farmers.
The government realised mid-term election in view, to accede to the ginners protest. Encouraged by the back up, KBP came out with intrinsic maiden pledge that it would protect farmers from the clutches of exploiters, making spectacularly clear intending IMF, WB, banks, fertiliser manufacturers, sugar mills rice mills, cotton mills and hoarders of agriculture goods. The last words have left nothing to be desired to be shield against exploitation.
The KBP president without tiring continued to say without breaking clutches of these powerful groups and Qabza Mafia, the framers cannot achieve meaningful independence. Making truth more meaningful he said the traders and middle men of agriculture commodities manipulate these commodities at very cheap rates from farmers at the harvesting time since poor growers neither have the capacity nor do they have the storage facilities to retain their hard earned products. The relevant authorities should take note of the truth and back up the ginners in helping the farmers who actually aim at good for all.