Pakistani spinners have lauded the government for recently accepting and introducing several fiscal policies which they say will assist the industry to function better. These policies include imposition of 10 percent Regulatory Duty on the import of yarn and fabric, specially from India, provision of long term financing to the ginning and spinning sectors and the reduction in long term financing and export financing by one percent. The All Pakistan Textile Mills Association (APTMA) has thanked the government for these helpful steps. The Value added textile sector, however, remains critical of the government for not addressing their problems. Though yarn prices have increased moderately and some enquiry has also been generated, cotton prices have risen further this week.
Seed cotton (Kapas / Phutti) prices in Sindh generally are said to have extended from Rs 2500 to Rs 3100 per 40 Kgs on Thursday. In Punjab they reportedly ranged from Rs 2600 to Rs 3250 per 40 Kgs, according to the quality. This means that seed cotton prices have risen by Rs 150 to Rs 200 per 40 Kgs since the beginning of this week. Lint prices in Sindh are said to have obtained from Rs 4900 to Rs 5600 per maund (37.32 Kgs) on Thursday, while in the Punjab they reportedly ranged from Rs 5300 to Rs 5750 per maund in a tight market. These rates show an increase in the price of cotton from Rs 150 to Rs 200 per maund, according to the quality. The recent increase in the value of the United States dollar reported at Pak Rs 106 and fear of a shorter current crop (2015/2016) have also imparted firmness to lint values.
Traders said in Karachi that nearly 1.4 million bales (155 Kgs) during the current season have been booked for import till now and may total about 2.5 million bales during the current season. Quality damage has also been reported in the current domestic crop leading mills to go for imported cottons.
Local cotton output may range from 11.5 to 12 million bales (155 Kgs) during the current season whereas the mills may need about 14.5 million bales (155 Kgs). Exports may range from 500,000 to 600,000 bales of cotton. Domestic mills have also reportedly covered more cotton recently due to problems of lower quality of lint which may persist in the local cotton for the remainder of the season.
Yarn rates have risen only slightly in the domestic market but the offtake remains mostly low. Thus only moderate enquiries for yarns are being received by the mills. There were also some reports in the market that considerable quantities of seed cotton from Sindh were being sold in Punjab due to higher rates there. In other news, traders said that cotton rates have gone up because the mills desire to produce higher quality of yarns and textile products for the export market.
On the global economic and financial front, the basic question remained as to when the United States Federal Reserve Bank would raise the interest rates. However, uncertainty, procrastination and lack of clear thinking have hitherto prevented the Federal Reserve to take a final decision. Thus lack of a clear policy by the US Federal Reserve to announce any thing regarding the interest rates since the beginning of the current calendar year (2015) has not only kept the American business in a state of animated suspension, but also kept the world at large essentially in a high mode of inactivity.
In America itself, the volatility and suspense on the equity markets as well business circles remains unusually high. Thus there is a lack of direction as the Federal Reserve has failed to provide a viable policy statement regarding the steps it will take to provide a definite direction regarding the cost of borrowed money the investors will have to pay in the approaching future.
As the US Federal Reserve is the foremost central banker in the world, most other central banks in Europe, China, Asia, South America, Canada or Australia also hesitate to undertake a robust policy regarding any meaningful change in interest rates in the absence of any lead being provided by the US Federal Reserve. This has not only bred a high element of volatility on the global markets, several economic sectors are also keeping their investment plans in abeyance.
Thus American economy is today hardly placed on solid foundations. As most countries follow the footsteps of the American economic policies, the lack of a pronounced direction in its financial direction remains a big hurdle in the improvement of global economic growth. Recent figures show and it has been remarked that the global economy is very fragile.
Presently the US Federal Reserve has not changed the interest rates till the middle of this week but is keeping its options open if they are to increase the interest rates at the end of the year, viz December 2015. Federal Reserve has reportedly stated that they "will assess progress - both realized and expected - towards (the Fed's) objectives of maximum employment and two percent inflation".
Despite the routine ups and downs periodically, the Chinese economy remains in trouble with a host of inadequacies. Recent reports indicate that the Eurozone's economic recovery is slipping again. The economic growth in the United Kingdom has slowed down to half a percent. Lower oil prices are continuing to take their toll throughout the Middle East, Iran, Russia, America, the United Kingdom, Indonesia and Venezuela. The African economic slowdown is becoming a cause of big concern. It thus appears that the current calendar year (2015) has hardly provided any meaningful progress to the global economy which remains bogged down incessantly.
Comments
Comments are closed.