Traders said on Thursday that now only about 1.2 million bales of cotton (155 Kgs) from the current crop in Pakistan (August 2015 / July 2016) remain unsold on the domestic market. Moreover, hardly a third of it is of good quality. Thus due to early depleting of this year's domestic crop the lint prices have reported to have become firmer for the better or higher quality. However, the global cotton prices are generally said to be subdued. This year's domestic crop may yield about 9.8 million bales on an ex-gin basis (155 Kgs each).
Pakistani mills may need between 13.5 and 14 million bales of cotton during the current season (2015/2016) and may thus needfully import three to four million bales. Exporters could ship between 300,000 and 400,000 bales. According to the seed cotton (Kapas/Phutti) arrivals reports for the current season (2015/2016) till the 1st of February, 2016 as issued by the Pakistan Cotton Ginners Association (PCGA), 9,612,711 lint equivalent bales have been received into the ginning factories from which the domestic mills have lifted 8,032,410 bales. Exporters have picked up 358,418 bales while an unsold quantity of 1,221,883 bales is still lying unsold with the ginners.
Generally speaking, the seed cotton (Kapas/Phutti) prices in Sindh are said to have ranged from Rs 2000 to Rs 3000 per 40 Kgs, while in the Punjab they reportedly ranged from Rs 2300 to Rs 3100 per 40 Kgs, according to the quality. On Thursday, lint prices in both Sindh and Punjab generally are said to have ranged from Rs 4700 to Rs 5650 per maund (37.32 Kgs) in a steady and stable market. Yarn sales were moderate but buyers did not show much interest in purchasing yarns.
There is a general feeling in the market that the textile industry in Pakistan being its largest economic sector has been very badly hurt. Both the quality and output of the Pakistan cotton crop during the current year (2015/2016) have been severely damaged which has adversely shaken up the country's economy. Bad and mixed quality of seeds, spurious supply of pesticides and fertilisers over the past several years are being cited by the growers and also the textile processors / manufacturers for the calamitous output of cotton this season. Such a debacle is thus being blamed on the suppliers of cotton inputs for which an enquiry by the government is being demanded.
In ready cotton sales from Sindh on Thursday, 400 bales from Sitharja are said to have been sold at Rs 5550 per maund (37.32 Kgs). In the Punjab, 200 bales of cotton from Vihari were reported to have been sold at Rs 5250 per maund, while 400 bales each from Mianwali and Rahimyar Khan both sold at Rs 5650 per maund on a steady and stable market.
On the global economic and financial front, it is becoming clear week by week since the beginning of this year (2016) that the start has been inopportune and the projections for the entire year and beyond continue to emit inauspicious signals. If anything, we have made a poor start this year. The continuing economic downturn appears to be a universal malaise where most countries and regions are caught in an unprecedented socio economic misery and political pitfalls, particularly in the Middle East casting their dark shadows on Europe. Take the growing refugee problem which is not only devastating Europe, but is also destructing the Far East.
According to Larry Elliot, the Economics editor of The Guardian, "Fresh evidence of a slowdown in the US economy has added to the jittery mood on global stock markets and sent shares tumbling on both sides of the Atlantic." The reason given is that America's service sector is growing at its weakest pace since more than two years.
In London, the FTSE 100 fell in tandem with Dow Jones at midweek and conceded more than 100 points by mid-afternoon. Thus the new year has commenced with further slowdown in output and new business growth has also eased. Not only the economic growth in America, concerns have arisen to weakness in the manufacturing sectors of the American economy. The recent sharp fluctuations in the price of crude oil are creating much volatility on the global equity prices.
Thus on last Wednesday the shares prices in the United Kingdom were reportedly pushed lower by financial stocks with banks hitting their lowest levels in more than four years. These unexpected developments of slacking economies and rising unemployment around the world have confounded not only the US Federal Reserve but also other central banks regarding any increase or otherwise in the interest rates.
Commensurate with these weaknesses in the global economy, the Bank of England has cut its prediction for the Gross Domestic Product this year from 2.5 percent in November, 2015 to 2.2 percent. Moreover, persistent low inflation also influenced in cutting the British growth rate.
The European Commission has also cut its forecast for economic growth in the Eurozone this year. It has been reported to have cut its prediction for the 19-country block in 2016 to 1.7 from 1.8 percent it had forecast in November 2015. The European Commission is also reported to have cited the refugee crises as being possibly responsible for presenting major political challenges which could curtail growth later on.
Moreover, the Chinese economy continues to remain plagued with a lower growing gross domestic product, equity markets are plunging continuously and the value of the currency continues to erode regularly in China. Thus the global economy continues to flounder.
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