Cotton trade moves up in volume; TCP expected entry helps price stabilisation

Trading in cotton in domestic market happily moved with pace, only occasionally with some hitch, when sellers pushed prices to be pulled down soon. But the situation improved a bit with the news that the PM has directed the Trading Corporation of Pakistan (TCP) to buy one million bales of cotton. As a result spot rate was higher by Rs 200, seedcotton and lint price also improved.
WORLD SCENARIO
Analysts see subdued markets until the end of the year - another few days. The investors are casual lifters and keeping away from aggressive indulgence. The debt uncertainties in Europe and budget worries seem roadblock affecting smooth flow. Dim trading is marked, as aggressive buyers are looking home bound due to holidays, China has been in field lifting from local farmers who would determine their move for the coming season. India has been content with some surplus ready to honour when ordered.
Pakistan is doing well, though some appear disturbed owing to unending fall in the cotton rates under global trend. On Friday, the US cotton futures closed flat, in the last trading session before the Christmas holiday. The key March cotton futures closed unchanged at 87.24 cents per lb, trading from 86.86 to 87.65 cents.
LOCAL TRADING
On Monday leading mills and spinners showed keen interest in cotton buying, up to 15000 bales in price range of Rs 3500 and Rs 5000. Spot rate was inert at Rs 4900, while seedcotton prices in Sindh were unchanged at Rs 1500 and Rs 2200. In Punjab phutti prices ranged between Rs 1600 and Rs 2300. Cotton consumers were at ease as cotton production was expected to rise by Rs 17.69 percent compared with previous season. Ginners were looking out for buyers so those prices could be pushed higher.
On Tuesday seedcotton prices rose on PM's assurance to PCGA. The TCP was expected to come when it was comfortable handling business. The spot rate maintained overnight level as buyers laid hands of 25000 bales in price range of Rs 3400 and Rs 5000. Millers bought cotton to their hearts content expecting prices to go up on TCP entry into market.
On Wednesday Trading in cotton turned cautious, as buyers apprehended prices could be pushed higher by the sellers. But the TCP indicated it would take around one month to start business. Official rate was unchanged, while seed cotton prices too were marked unchanged in Sindh at Rs 1600 and Rs 2300, in Punjab phutti sold at Rs 1600 and Rs 2500. In a hurry cotton buyers lifted 28,000 bales at Rs 3500 and Rs 5000. On Thursday buyers were apprehensive about action by TCP and hence 25000 bales of cotton were lifted at Rs 3500 and Rs 5050. However, APTMA has opposed the role of TCP, which is against the free market economy. Spot rate was unchanged at Rs 4900, seedcotton in Sindh was selling at Rs 1600 and Rs 2300, in Punjab phutti ruled at Rs 1600 and Rs 2500.
On Friday, KCA official spot rate was increased by Rs 100 to Rs 5,000. Prices of seedcotton in Sindh were at Rs 1500-2300 and in the Punjab at Rs 1600-2600, they said. In ready dealings over 25,000 bales of cotton changed hands at Rs 3300-5,150.
On Saturday Trading Corporation of Pakistan's (TCP) likely entry, played a stabilising role in recovering the prices on the cotton market. The Karachi Cotton Association (KCA) maintained official spot rate for the second day in a row, by Rs 100 to Rs 5,100. Prices of seedcotton in Sindh were at Rs 1600-2300 and in the Punjab at Rs 1800-2600. In ready dealings nearly 10,000 bales of cotton changed hands at Rs 3700-5,200, they added.
OPPOSITION WAS CERTAIN, SO IT IS THERE
The ginners, for quite sometime, as the cotton price started contracting globally, wake up siding with growers calling authorities to induct TCP, which ginners thought will stabilise the cotton price. The government busy in meeting other challenges kept mum for around a fortnight. The other day however, the Prime Minister, ordered the TCP to procure one million cotton bales to stabilise cotton prices. The ginners leaders were called for talks, including support prices of seedcotton and ginned cotton.
The circles knowledgeable to the interests of various sectors were calling for across the table efforts to thrash out aching spot amicably. In minus ethics businesses here, there is no scope for mutual sort of give and take, rather, inviting third party who leave both disputants nowhere near solution or satisfied to one, dissatisfied others.
No sooner the ginners had started celebrating PM's order to TCP, the KCA took the arena pronouncing as opposed the induction of TCP for procuring one million bales of cotton. It explained any intervention of the public sector organisation in cotton market negates the policy of free trading. For equitable decision KCA advised the government that any decision regarding the cotton policy should be taken after thorough discussion among all the stakeholders including the KCA.
GAS STOPPAGE, TAXES MOST DESTRUCTIVE
Agriculture is backbone of economy, if it is so agreed, needs care rather special care. This sector provides food and wear - within country and outside the country in the shape of smuggled goods.
Earlier during pre-partition days, so goes narrative that this part supplied essentials to parts of the then undivided India. Now when God has made us whole and sole of this greenery, human contribution falls far below. The farmers have with few days gap been in the priers with protest note that stoppage of gas to the fertiliser industry, imposition of GST on agriculture implements, as most destructive steps taken against growers and agriculture sector.
Farmers seemingly too anxious government would have attempted such action to have yielded in progress and prosperity. Instead, Dr Tariq Bucha expressed regretfully government has failed to take any correct and positive step for the improvement in Pak economy. He said the most vital sensitive and crucial component of Pak economy has and still is agriculture with 22 per cent share in GDP. He said the farmers and agriculture sector faced destructive measures such as stoppage of gas to fertiliser industry, imposition of GST on agriculture machinery ie tractor and other implements. Dr Bucha warned productivity would suffer further because of non-affordability for buying tractors, prices of which have soared. He hoped critical look should be cast for finding ways to improve productivity.
WTO TALKS END WITH DOHA ROUND STILL DEADLOCKED
Should stakeholders rejoice at the access of Russia to the world trade body at 18 years of negotiation with two other countries - Samoa and Montenegro - to WTO fold - The parliaments in all three countries will have to ratify the move. But conference chairman and Nigerian Trade Minister Olusegun Aganga voice regret at the impasse. In the next breath called on the WTO's 153 members states to more fully explore different negotiation approaches and intensify efforts to look into ways to overcome stalemate.
The WTO being discussed in detail has distantly to do with cotton and textile business. But the WTO initiator link it with the smiles on the faces of have-nots has much to do with equity in business. While those who are Master of Science and technology look down upon raw materials grown at great cost of shedding sweat and blood.
The sponsor of the great body, unlike those who have to encounter with hard facts, cannot but value their ideas and product. WTO has come to its shape and size after decades, a big achievement, but Doha round has still been some where in mid-way. The sponsors - philanthropists should revisit their blooming world without desired essence. Is this world people call at its zenith and many lustrous-self sees it as global village. The smiles remain in royal palaces and presidencies.
The WTO chairman is with his hand up in prayers for effective negotiations to overcome stalemate. As next conference is seemingly not very far, hopefuls keep eyes on with all that in positive.
PM THANKED FOR ASKING TPC TO SAVE GROWERS FROM LOSS
The ginners were for long attempting to persuade government to induct TPC into market for buying cotton, which according to them, were losing. At last leaders met the PM resulting in agreement to advise TCP to start buying from market as poor growers were selling cotton at 70.72 cents a pound against global rate at 83-85 cents a Lb. What poor growers gain, according to knowledgeable sources, who are rushing their produce to mills and cant wait due to domestic plight. The request and nod came too late. The TCP who probably was taken as to be ready for the job. But the authorities came out with that they would only be ready to pick up the responsibility after a month.
Then the wait for money from the ministry may also take time. Meanwhile according to reports Pakistan had already exported five lakh cotton bales and had earned Rs 12 billion. Pakistan is expected to export 0.8 million bales that will add up to Rs 20 billion to the exchequer. The crop is not only the problem. The poor growers who dump cotton bales at the ginners have to be paid - sooner or later - The headache of the one million bales partly over now, and tackling with the SBP remains.
The ginners have written to the SBP governor that they have lost billions due to recent floods in Sindh. Reply is awaited. But authorities should find ways they are spared and various sectors of cotton and textile resolve problem among themselves, sources said.