Rains have started behaving providing sellers lead to go ahead, but the manipulations have once again forcing cotton prices to inch up. Spot rate on the opening day at Rs 6300 was up seen at Rs 6400 on Thursday but was brought down to Rs 6300 on Saturday.
WORLD SCENARIO
Cotton futures with no strength and support from anywhere taking whatever little it can from outside markets. The leading cotton traders are hard up thinking how and when to decide to sell or buy. Low cotton production owing to drought in Taxes and floods in Mississippi keep them in double mind. However, despite tricky world situation cotton prices are gradually coming down - around 98 cents a pound to 1.09 a pound.
China has normal way to tackle crisis. It has begun buying from local growers to keep them strong enough. Only Pakistan is in deep ditch, more due to shabby treatment cotton growers face. In Australia, Brazil and Africa cotton growers are with enough stock to supply needy world over. India too has asked exporters to make efforts to sell nearly five million bales.
On Monday the NY cotton futures finished with small losses as the market seemed to be finely balanced between investor sales and mill/commercial buying in the market. The key December cotton contract on ICE Futures US dropped 1.60 cents, or 1.5 percent, to close at 99.64 cents a lb, trading from 99.52 cents to $1.023. The range was little changed from Friday's band of 99 cents to $1.02. Last Thursday, December ended at 99.29 cents a lb, marking the first time since August. 11 that the second position cotton contract closed under the psychological $1 per lb mark. Total volume on Friday on the cotton market was 14,873 lots, versus the previous session's 22,185 lots, ICE Futures US data showed. Monday's volume of almost 11,700 lots was less than five percent under the 30-day norm, preliminary Thomson Reuters data showed.
On Tuesday the US cotton futures settled higher on trade and investor buying inspired in part by a surge in outside markets, but some analysts feel weak fiber demand could undermine the advance in the days ahead. The key December cotton contract on ICE Futures US gained 0.51 cent to conclude at $1.0015 a lb, trading from 99.50 to $1.0218. For the third straight session, the trading band of the December contract was little changed. Monday's range stood at 99.52 cents to $1.023 and the Friday band was at 99 cents to $1.02. Traded volume on Monday was nearly 8,900 lots, more than a quarter below the 30-day norm, preliminary Thomson Reuters data showed.
On Wednesday the NY cotton futures settled lower on investor sales as the market was again pinned in a trading band with players reluctant to take positions in fiber contracts given the debt woes in Europe. The key December cotton contract on ICE Futures US eased 0.62 cent to finish at 99.53 cents a lb, dealing between 99.16 cents and $1.01. For the fourth session in a row, the market basically stayed in a range running from 99 cents to $1.02. Tuesday's range was 99.50 cents to $1.0218, Monday's range was 99.52 cents to $1.023 and the Friday band was at 99 cents to $1.02. Total volume traded on Wednesday hit almost 8,500 lots, around a third below the 30-day norm, preliminary Thomson Reuters data showed.
On Thursday the NY cotton futures settled higher on investor short-covering and possible consumer buying as the market finally raced past a four-day trading band and could move up on follow-through purchases next week. The key December cotton contract on ICE Futures US jumped 2.69 cents, or 2.7 percent, to finish at $1.0222 a lb, dealing between 98.21 cents and $1.0317. Over the preceding four sessions, the cotton market's December contract has traded in a range running from 99 cents to $1.023. Total volume traded on Wednesday hit almost 15,000 lots, nearly a quarter above the 30-day norm, preliminary Thomson Reuters data showed. Total volume traded on Wednesday in the cotton market reached 10,204 lots, versus the previous session's count at 11,154 lots, ICE Futures US data showed.
On Friday the NY cotton futures ended lower on investor sales due to fears of an economic slowdown in top consumer China, as the market ended the third quarter of 2011 with sizable losses, as recession worries hit the market. The key December cotton contract on ICE Futures US fell 2.03 cents to end at $1.0019 per lb, trading from 99.55 cents to $1.03. The market has been pinned in a rough range from 99 cents to $1.0317 over the past five sessions. Cotton is the seventh worst-performing commodity on the Reuters Jefferies commodity index. The market is down 15.7 percent on the quarter. It fell 5.3 percent on the month and is down 1.4 percent on the week. Total volume traded on Friday hit almost 13,900 lots, around 12 percent over the 30-day norm, preliminary Thomson Reuters data showed. Independent cotton analyst Mike Stevens in Mandeville, Louisiana, said news that China's manufacturing sector contracted for a third consecutive month deflated the positive sentiment from Thursday's close.
LOCAL TRADING
Growers learnt, belatedly tough to hold back just picked up cotton in their own inventory rather than dumping at the ginning mills door to unnecessary erode prices. However, spot rate was put at Rs 6300, seedcotton in Sindh down by Rs 200 and Rs 300 to Rs 2300 and Rs 2800, while seedcotton in Punjab was up by Rs 200 to Rs 2000 and Rs 3000.
On Tuesday active buying was witnessed but spot rate stayed put seedcotton prices in Sindh held to previous size. In ready 9000 bales of cotton changed hands in rates between Rs 5,500 and Rs 6,500 depending on quality. The market sources were not clear about rate because both buyers and sellers were acting cautiously. About global developments they expected demand to stay restricted and price gradually slip downward.
On Wednesday spot rate was pushed up by Rs 100 to Rs 6400, as quality stock was held back for reaping good harvest. However, buyers mopped up available stocks considering possible rise any time. The seedcotton prices in Sindh and Punjab stayed nearly unaltered. The global market however, is steadily going on designed pattern against local uncertain goings despite hope of better crop, as rains have started behaving.
On Thursday steady trend was marked, as mills showed interest in buying irrespective of the price. The spot rate was inert at Rs 6400, seedcotton in Sindh was unchanged for third day in a row at Rs 2300 and Rs 2800, in Punjab also seedcotton stayed at previous level. Nearly 13000 bales of cotton were lifted between Rs 5500 and Rs 6800. India supply call has softened Pak cotton sellers attitude. How long this pressure will stand in Pak buyers good stead a wait is needed.
On Friday firmness prevailed on amid strong mills' buying. KCA official spot rate was inert at Rs 6,400. Prices of seedcotton in Sindh were unchanged for the third day at Rs 2300-2800 and rates in Punjab followed the same path, showing no change at the overnight levels at Rs 2000-3000. In ready dealings over 14,000 bales of cotton changed hands between Rs 5,900-6,700. Persisting mills demand helped the prices to retain the present levels. The fine quality is attractive for the buyers and gaining ground, the low quality has failed to improve from the current levels.
On Saturday downward trend was witnessed on the cotton market as phutti arrivals increased at the ginneries. Spot rate was lowered by Rs 100 to Rs 6,300. Prices of seedcotton in Sindh were down by Rs 100 to Rs 2200-2700 and rates in Punjab were at Rs 2000-2900, they said. In ready dealings about 7,000 bales of cotton changed hands between Rs 5,600-6,500.
X'MAS ORDERS MUST BE ON WAY
A couple of months hence, December is lurking with X'mas handful orders from importers, an opportunity for bumper harvest by exporters. But the nearly unavoidable constraints the interested quarters are faced, which can only be done away with by authorities. The various sectors of textile exporters, therefore, bank on the top government officials to address such as winter gas loadshedding plan and keep textile industry running and working. So are importers of textile products who have eyes set on the approaching X'mas real big sales. Very lately textile exporters are apprehensive of one or the other relevant problem mainly shortages or outages of gas and electricity.
Besides, high cost of doing business take away export edge aggressively by the regional competitors leading being China and India. Bangladesh bereft of raw cotton locally and cotton yarn earns foreign exchange twice or thrice as much Pakistan manages. The will and the world-wide contact Pakistan has maintained right from the day this country was carved on the map of this world. Remaining bogged down for decades early in 2011 textile exporters made record by earning $16 billion, as ministry managed availability of yarn possible and at acceptable rate.
Now as X'mas shopping rush and push the textile exporters naturally expecting export orders provided products have not been burdened with high cost of doing business.
LET CLCV OCCURRENCE IS NOT HEARD EVERY AGAIN
About 10 years back or so CLCV played havoc with the cotton crop leading to imports amounting to billions of rupees. Details of the issue under discussion only a gnat late, what as a nation such with everything that makes progress and prosperity a play thing, Pakistanis have made practically an important event until today India no sooner than enjoyed the free air and movement, that country stretched hands of friendship towards the then Union of Soviet Socialist Russia.
India bereft of scientific knowledge and technology, bought from needle to flying machine along with tricks of trade; The virus that had deprived Pakistan at much needed foreign exchange and needed a way out from coming season was light gossip in gatherings meetings and conferences. A recent report reveals serious efforts for doing away with the dreaded disease with USDA help. Do readers know how much CLCV is destroying four million bales of cotton worth Rs 100 billion annually. In a recent meeting different methods of co-operation with respect to cotton productively enhancement project costing nearly $4.2 million, funded entirely by the USDA and launched last year in order to increase cotton production in Pakistan.
A lead research scientist of USDA confidently expressed the hope project would focus on three areas ie germ plasma collection, capacity building and use of biotechnology in solving the CLCV issues in Pakistan. It is with great hope growers can look at the textile ministry to show up not only that they are concerned about how cotton productivity but would keep the time factor and result in view. Use of local scientists and research institutions should be ensured and in right earnest. Funds are already in hand and nothing else should come in the way to annual loss of Rs 100 billion.
INDIA LIKELY TO SUPPORT EU DUTY WAIVER
Recent approach to move India nod to the EU duty waiver on some textile exports to that country, lying in WTO for a decision now appears likely. The package rotting in WTO for the nearly last one year and was a philanthropic offer to mitigate damage left over by unprecedented floods. How long away yet is the package from Pakistan any body's guess. But the relevant man who had been exercising his right has indicated to now support when the package comes up for hearing. Whether the message from India has been received with conviction or their wait adds to, God forbid only distress and remorse.
The assurance comes out of joint statement of Indo-Pak commerce ministers who have agreed to work more than double bilateral trade within three years, from current levels of 2.7 billion US dollar to about six billion dollars per annum. Both noted with pleasure that India and Pakistan in last few months have constructively engaged towards a liberalised visa regime. The new business visa regime would allow multiple entry and could to a period of one year. They hoped both countries would cooperate and work in close co-operation of multilateral forum such as WTO and Saarc, thus strengthening their economies.
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