Due to a spate of public holidays in Pakistan extending from 17 July, 2015 to 21 July, 2015 as announced by the government due to the Eid-ul-Fitr, business activity has mostly ceased as the various markets will remain closed for five days. Moreover, there will also be no trucks and transportation plying on the roads to haul any cotton from the ginneries to the textile mills in various parts of the country.
Over the past few days, ready cotton business has gradually declined where only a handful of needy mills bought some lint. The extra long vacation has dampened fresh enquiries from the mills. Thus business should start on 22 July 2015, viz next Wednesday. Thus fresh business should now pick up at the middle of next week. There was mostly quiet condition on the cotton market on Thursday. The notional idea of new crop (August 2015 / July 2016) cotton seed (Phutti / Kapas) from Sindh reportedly ranged from Rs 2300 to Rs 2350 per 40 Kgs, while in the Punjab it was said to have ranged from Rs 2300 to Rs 2400 per 40 Kgs.
The new crop lint prices from Sindh were said to have extended from Rs 4700 to Rs 4725 per maund (37.32 Kgs). In the Punjab, the ginned cotton prices reportedly ranged from Rs 5000 to Rs 5100 per maund, according to the quality. The cotton market was characterized by extreme quietness on Thursday.
It was reported that about 5000 bales of new cotton was being ginned daily. Trade circles added that nearly 60 ginning factories were operational by now in Sindh, while in the Punjab nearly 10 ginning factories were functional. The quality of the new crop was described to be good till now.
Yarn prices were said to have been weak over the past many months due to which the spinners have been very worried. Due to a plethora of adverse factors, the textile mills in Pakistan are going through a very rough patch. The All Pakistan Textile Mills Association (APTMA) is claiming they are suffering from many adverse causes and have again requested the government to remedy the situation immediately, particularly for the export sector.
APTMA desires that the government should zero rate all taxes levied on exports. Furthermore, they have requested the government to provide regionally competitive electricity tariff of Rs 9 per unit for the textile industry. Finally, APTMA also desires to obtain Export Refinance and Long Term Financial Facility (LTFF) for the complete Textile Chain. In the meantime, the Pakistan textile industry continues to suffer while many units have been forced to close down voluntarily to avoid further losses.
On the global economic and financial front, two issues remained in the limelight, namely Greece and China, whose poor performance sent shivers around the world. On Thursday afternoon, talks were in progress between Eurozone investors on emergency funding to keep the Greek banks functioning following approval of the Greek parliament of the necessary reforms required for a third bailout. Politically, the incumbent Greek government is likely to survive even after failing to maintain its majority when 38 of its members of parliament voted against the reforms. Furthermore, the European Central Bank is likely to ease its squeeze on the Greek banks making way for their reopening.
Greece is reportedly still in the throes of a cash deficit whereas the banks have been closed for nearly a fortnight. There continues to be incinerating events of ugly magnitude on the streets of Greece in addition to bombshells and burning of trucks, police stations as police retaliated with tear gas and stun grenades into the protesting crowds who have rejected the government's acceptance of the deal with its bailout creditors.
Reports from central Athens added that many parts of the city were set alight by the disgruntled anti - austerity protestors. The law and order situation in Athens was very volatile on Thursday while the Greek economy is a wreck, according to reports from the capital city. Such a condition in Greece has mostly pushed global equity markets downwards, Critics of the government are reported to have said that the European Union has "pressurized Greece on its knees and it has capitulated". It is said that Greece has accepted an array of harsh economic reforms from its credit lenders which it is now finding difficult to impose on its populace.
Skepticism is emerging among the global economic analysts whether to believe the figures provided by China pertaining to its financial data including the GDP figures. It is feared in many monetary circles that there is no solid base in China where there is increasingly believed that money has been created without adequate backing. Analysts have added that the economic data provided by China in the recent past is now often believed to be dubious and hence unreliable.
In fact, recent assessments of the Chinese economy indicate that it shows few signs of real revival, according to some analysts. It is contended by some observers that most data from China is riddled with doubts and uncertainties. For example the Chinese economy is stuttering with steel prices which have sunk to their lowest level in 20 years which have badly hit the people income.
Though the Chinese economy has risen dramatically over the past several years, but the uplift in its economy was seemingly based on a bulging credit bubble which was sustained by the demand of its products from America and Europe. Thus in the previous week the equity markets in China plunged by an estimated thirty percent wiping off more than three trillion dollars from its earlier level. Such a development is hurting the countries which had routinely depended on exports to China. With these developments in Greece and China, there appears hardly and chance for early revival of the global equity and financial markets. The Great Recession of 2008 must therefore continue.
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