Despite less than a million bales remaining unsold from the current crop (2015/2016), there is no buoyancy on the domestic cotton market. Some sources put the remaining unsold crop from the current season at about 800,000 bales (155 Kgs) from which only about 20 percent is of good quality.
Seed cotton (Kapas/ Phutti) prices Sindh are said to have ranged from Rs 1500 to Rs 2700 per 40 Kgs on Friday, while in the Punjab they reportedly extended from Rs 1700 to Rs 2900 per 40 Kgs, according to the quality. Now not much seed cotton remains on the fields or in the market. Seed cotton prices suffered a downfall by about Rs 200 per 40 Kgs this week.
Lint prices in Sindh are said to have ranged from Rs 4500 to Rs 5450 per maund (37.32 Kgs), according to the quality, and in the Punjab they reportedly ranged from Rs 4600 to Rs 5500 per maund on Friday in a tepid market. Lint prices are reported to have fallen by Rs 100 to Rs 200 per maund in both Sindh and Punjab this week. Prices of Cotton are said to be weak internationally. China, The United States and India are all reporting cotton prices to be at lower levels. Textile prices are also mostly reported to be subdued. Indeed the American cotton futures prices are said to be at seven year low levels. There are said to be few buyers in the market.
In Pakistan the textile industry continues to remain in difficulty. The All Pakistan Textile Mills Association (APTMA) has pleaded again with the government to protect the domestic textile industry from subsidised imports of all kinds of yarns and fabrics entering for domestic consumption in Pakistan. APTMA claims that the domestic textile industry is paying high cost of energy, incidentals of taxes on exports and blockage of refunds worth Rs 200 billion.
On the last Tuesday the government is reported to have revised downward the production as well as the area target for the incoming cotton season (August 2016 / July 2017) and fixed it at 14.1 million bales (170 Kgs) from three million hectares as against 15.49 million bales from 3.11 hectares which was estimated for the current season (2015/2016)
Ready cotton sales from Punjab reported on Friday included 1300 bales from Harunabad at Rs 5260 per maund (37.32 Kgs), 200 bales from Mianwali at Rs 5450 per maund, 400 bales from Rahimyar Khan at Rs 5500 per maund and 400 bales from Alipur at Rs 5550 per maund in a weak market.
On the global equity and financial markets, the name of the game since the beginning of this year has been volatility. Most observers, analysts and investors have been confounded by the fluctuating fortunes on the commodity markets which is almost unprecedented. This week started with prices on sundry bourses and equity markets slumping sizeably but seemed to pare their losses at the latter end of the week.
Last Thursday, equity prices on Wall street fell because of decline in materials and stocks prices in these turbulent times. Again on Wednesday the US Stocks fell more than one percent pulled down by financial stocks. It appears that presently the stocks markets have become intertwined with crude oil prices so that the two appear to be moving in tandem with each other. On Wednesday, choppy trading was witnessed on Wall Street.
In reality, it is not only the United States but in most parts of the world the sundry economies are showing a poor performance. The International Monetary Fund (IMF) has termed the global economy as being vulnerable. Similarly, due to slowing down of the economies of the developed world and the weakening of the emerging markets, City has reportedly marked down its forecast of the 2016 global expansion to 2.5 percent from 2.7 percent.
The Britain's top equity index FTSE fell earlier in the week due to reported slump in banking and commodity sectors. Similarly, the European shares also conceded losses due to weakness of the banking and commodity sectors. Tokyo shares slipped due to a stronger yen and faltering crude oil prices. Indian shares prices registered a drop last Tuesday in light of the forthcoming federal budget and the persistence of the oil glut. China's stocks prices were reported to have tumbled more than six percent on last Thursday neutralising a recent rally sharply. Following suit, Hong Kong equities declined in line with the fall in shares of mainland China.
Generally speaking, people are losing hope concerning the integrity and well-being of the European Union after the referendum announced by the British prime minister for June 2016 to determine if the United Kingdom will remain in the Union. Refugee problem in Europe is aggravating which may not only disrupt the social and political harmony of Europe but may lead to anarchy on the Continent.
Furthermore, inflation in the Eurozone has been revised downward for January, 2016 from 0.4 percent to 0.3 percent. Moreover, slump in British economy appeared sharply in 2015. Moreover, the Brazilian jobless rate jumped to 7.6 percent in January, 2016. These negative developments are hurting the global economy decidedly.
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