Cotton prices fully firm

Cotton prices remained fully firm on the ready market on Thursday primarily due to the devaluation of the Pakistani rupee at around Rs 134.60 to the U.S. Dollar recently. Thus lint prices are reported to have gone up by Rs600 to Rs 800 per maund recently. However, currently the price of the American Dollar is said to be Pakistan Rupee 132 on the open market.
Under the generally tight situation in recent days, seed cotton (Kapas/Phutti) prices have moved up by about Rs 200 to Rs 300 per 40 Kgs, while the lint prices have gained about Rs600 to Rs 800 per maund (37.32 Kgs) in the recent past.
Thus seed ctton prices in Sindh are said to have ranged from Rs 3700 to Rs 4000 per 40 Kgs, while in the Punjab they reportedly ranged from Rs 3700 to Rs 4300 per 40 Kgs, according to the quality.
Lint prices in Sindh are said to have extended from Rs 8300 to Rs 8700 per maund (37.32 Kgs) on Thursday, while in the Punjab they are reported to have ranged from Rs 8400 to Rs 8700 per maund in tight market. Crop size for the current year (2018/2019) is said to be around 11.5 million bales (155 Kgs).
Traders said in Karachi that arrivals of cotton into the ginning factories are going up and the volume of business has also increased. Spinning mills are reporting better business so that some of the mills which had closed earlier are again starting their manufacturing.
All Pakistan Textile Mills Association (APTMA) has appreciated the government decisions for providing gas to the industry (Exporters of five zero rated sectors) all off takes at Rs600/MMBTU, all inclusive, across the country. APTMA, while thanking prime minister Imran Khan and also the federal minister of finance, Asad Umar, federal minister for petroleum Ghulam Sarwar and the federal minister for commerce, textile industry and production, Abdul Razzak Dawood (APTMA) has said that with this visionary step, the Pakistani textile industry is all set to achieve the export target of U.S. Dollars 30 billions to help overcome the country's current account deficit of U.S. Dollars 17 billion.
In ready business reported on Thursday, 1000 bales of cotton from Shahdadpur in Sindh sold at Rs 8250 per maund (37.32 Kgs), 400 bales from Layyah in Punjab sold at Rs 8400 per maund, 200 bales from Khanpur sold at Rs 8625 per maund and 600 bales from Rahimyar Khan sold at Rs 8700 per maund.
On the global economic and financial front, the foremost news concerns the dramatic fall in equity markets this week. Though President Donald Trump calls it a "correction", such a selloff has not been seen in many months. The dumping of shares spread widely into Asia and Europe following the American rout since the beginning of this week.
Besides the turbulence on the American stock markets, the index of equity volatility in Europe rose sharply to its highest point in more then four months following the fear which struck the investors.
Foremost in causes for this equity slump around the world is the increasing fear of the unceasing trade war between America and China. A slow-down of the Chinese economy and the weakening of its currency are also adding to the global business gloom. More recently, an increasing negative sentiment pertains to the negative projection of the global economy for the incoming year (2019) and beyond which has also hurt the equity markets adversely.
Besides the much predicted rout on the global equity markets, some analysts believe that the current fiasco is just the beginning and the real crisis awaits us in the not too distant future. In other words, the global economic crisis will get much worse before it gets better.
It has been reported that this week witnessed the sharpest losses in America in eight months while the Asian markets have slumped to their lowest levels in nineteen months.
Some observers have said that the worldwide selloff in the equity markets followed the statement of the Chief of the International Monetary Fund (IMF), Christine Lagarde, that the valuations of stocks on the share markets have been "extremely high". Thus the markets in Asia and Europe followed the American trend which slumped last Wednesday. It may also be noted that President Donald Trump blamed the United States Federal Reserve Bank for increasing the interest rates in America which he deems to be a "crazy" step.
Thus we may note that world equity prices have slumped sharply this week regarding which some analysts believe that it is the rising bond yields which is pulling money out of the stock market.