Since the arrivals of the new crop (August 2015 / July 2016), seedcotton prices have reportedly suffered a deline Rs 500 to Rs 600 per 40 Kilogrammes. Similarly, lint cotton prices have also said to have fallen by Rs 350 to Rs 400 per maund (37.32 Kgs). Thus new crop seedcotton prices are presently said to be ruling from Rs 2300 to Rs 2500 per 40 Kgs, according to the quality. In the Punjab, seedcotton prices from the new crop were said to range from Rs 2500 to Rs 2600 per 40 kilogrammes.
New crop lint cotton was also weaker and is said to have ranged from Rs 4900 to Rs 5000 per maund (37.32 Kgs) in Sindh and from Rs 5100 to Rs 5200 per maund in the Punjab. Till now, a reported seven ginning factories in Sindh are said to have become operative and are ginning the new crop, while in the Punjab three ginning factories are pressing the new crop. Thus a total of ten factories have started ginning the new crop in Pakistan.
In ready sales of new crop cotton (August 2015 / July 2016), 200 bales of new crop cotton from Sultanabad in Sindh reportedly sold at Rs 4,600 per maund with delivery stipulated on the 25th of July 2015. Furthermore, ready cotton sales included 400 bales from Hyderabad at Rs 4900 / Rs 4925 per maund, 200 bales from Shahdadpur sold at Rs 4925 per maund, while 200 bales from Tando Adam and 400 bales from Kotri both are said to have been sold at Rs 4950 per maund.
It is not only the price of raw cotton which is weak, yarn prices are also weak. Many textile mills are said to be facing much difficulty. With a new cotton crop (2015/ 2016) output presently being projected as being satisfactory there is said to be increasing pressure on cotton prices, much to the detriment of the cotton grower. With political confidence said to be under decline in the country much of economic activity has also slowed commensurately. There is much worry in business circles regarding the impending political future in the country. Moreover there are also reports regarding a financial crunch in the country so that money availability has reportedly become tight which has become a worry for business and trading houses.
One report even stated that some quantity of old crop of low quality sold at Rs 3400 per maund (37.32 Kgs). Thus cotton prices are said to be facing continued pressure. Regarding cotton consumption in Pakistan during the outgoing 2014 /2015 season, it is said to be around 15.5 million bales of domestic size (155 Kgs). Mills consumption for the next season (2015 / 2016) also being projected around 15.5 million domestic size bales.
With low yarn demand from China and increase in government taxes imposed / increased by the government in the federal budget announced earlier this month, Pakistani mills claim that their viability has been badly eroded.
On the global economic and financial front, Greece remains the focal point amid fears that if it defaults by not repaying 1.5 billion Euros to the International Monetary Fund (IMF) within the 30th of June 2015, serious problems may arise not only in the Eurozone, but the adverse impact will surely travel to other regions around the world. Reports say that in case of such an eventuality, there could be run on Grecian banks which could bring in capital controls by the government which would willy nilly impel Greece to leave / exit the Eurozone viz Grexit.
The daily decline of confidence in the Greek economy and the lackluster handling of its finance is sending negative signals to the sundry economic managers around the world. Equity markets have decidedly underperformed since the beginning of 2015 as agreement between the leading creditors of Greece and the financial managers of Greece are keeping a viable solution to the problem still dangling dangerously for the world at large.
Thus the Greek economic misery is not only rattling the global equity markets infinitely since the inception of the current year (2015), concerns have also grown more evidently in the emerging markets. At midweek, apprehension regarding the fearful drama being played out in Greece both between the borrower and the sundry lenders is creating unsettled and incomprehensive feelings regarding a possible dangerous denouncement for the global economy at large.
Thus at midweek mixed feelings on the equity markets were reported in the United States, but several European markets as well as the Asian markets posted sizeable losses in their values. Other reports indicated that the six-year bull run in the American stocks markets is facing a fatigue which is projected to last till the end of the current year (2015).
Indeed, howsoever small, it has now been reported that the United States economy contracted during the first quarter of 2015 due to inclement weather, a strong dollar, spending cuts in the energy sector and disruptions at West Coast ports. However, Reuters reported from Washington that now growth has rebounded as the retailers are reporting strong sales in May (2015) and employers have stepped up hiring. "Housing is also strengthening and manufacturing activity is beginning to stabilise".
As a result of the impending bombshell in the lackluster performance of the Greek economy and the snowballing of its debts, last Wednesday new Wall Street mostly lower, the resurfacing of serious concerns regarding the Greek economy put Britain leading share Index FTSE downwards. Similarly, the European shares also retreated due to the Greek financial crisis. German business confidence also weakened for the second consecutive month in a row. India's benchmark index BSE also retreated due to decline by international lenders to accept the latest proposals of Greece to settle its loan issues.