Low activity was witnessed on a subdued cotton market on Thursday. Domestic textile mills are not doing well. However, mills producing finer textile had earlier booked a good quantity of imported cotton which is thus pressurizing the domestic cotton prices as well as the sales activity. However, the local textile activity is not doing well and the mills are facing a difficult time. Imports of cotton into Pakistan during the current season could range from 4 to 4.5 million bales.
Seed cotton (Kapas/Phutti) prices in Sindh are said to have ranged from Rs 3000 to Rs 4100 per 40 Kgs, while in the Punjab they are reported to have ranged from Rs 3600 to Rs 4200 per 40 Kgs, according to the quality.
Lint prices in Sindh are said to have extended from Rs 8400 to Rs 9050 per maund (37.32 Kgs), while in the Punjab they are reported to have ranged from Rs 8600 to Rs 9050 per maund
Yarn and textile prices are very weak so that these are reports that several mills have piled up unsold quantities of yarns in considerable number. Hardly much sales are being reported by the spinners.
This year's (August 2018/July 2019) cotton production in Pakistan is unlikely to surpass eleven million bales (155 Kgs). Due to the difficulty with sales of yarns by the domestic mills, the entire cotton economy is facing a difficult time in Pakistan.
On Thursday, 200 bales of cotton from Burewalla in Punjab reportedly sold at Rs 8450 per maund (37.32 Kgs) in an insipid market. Then 200 bales of cotton each from Chistian and Harunabad sold at Rs 8600 per maund (37.32 Kgs), while 200 bales from Chock Munda sold at Rs 8850 per maund.
Six licensed cotton brokers of Naseem Usman Panel have been duly elected unopposed of the Brokers Advisory Committee of Karachi Cotton Association for the years 2018-19. Muhammad Naseem Usman, Chairman; Girdhari Lal Assudomal, Vice Chairman; Muhammad Aamir Naseem, Secretary; Tariq Abbas Joint Secretary; Muhammad Ali Taufique, Treasurer; Chander Lal, Public Relation.
The Chairman of the Broker Advisory committee has said on behalf of the panel that they would like to thank all 320 KCA brokers for their trust on them. They would continue with their effort for resumption of hedge trading under the KCA platform, which would be beneficial for all stakeholders of the cotton & textile industry. They would also continue to look after the interest of the Brokers Committee.
He urged upon government, steps should be taken to increase the cotton production on the warfooting basis in the coming years to meet the rising requirement of the local Textile Industry, and also consider activating the research organisation departments accordingly.
Special emphasis should be laid on quantity and quality of cotton equally as Pakistan is lacking behind in both these area.
On the global economic and financial front, the world economy at large moved into further muddle, confusion, disarray and disorder. While Chinese economy has already been hit by the trade war which started earlier this year when America slammed several tariffs on Chinese products which were traditionally shipped to the United States, now the recent news that the economies of both Germany and Japan shrank during the third quarter of 2018 has provided further gloom to the global economy.
We may here observe that if three of the four largest economies, namely China, Germany and Japan have received a setback, the economic depression could conceivably spread to the United States in the not too distant future.
This week's collapse in the prices of crude oil has deeply hurt the oil producing countries from the Middle East, South Africa, Russia, Venezuela to Canada, Indonesia to Angola. The expectation was that crude oil prices would rise to $100 per barrel, but instead they sank below Dollars Fifty barrel over the past couple of months.
Global stock markets fell to lower levels on Thursday while U.S. stocks were also reported to have opened lower on Thursday. Thus the turbulence and volatility on the global equity markets continued to take their toll. In Japan, the slowdown in its economy has been linked to natural disasters which have devastated the country. Though Germany's economy shrank for the first time since 2015 in the third quarter of this year the reason cited for decline is that it was hit by new automobile emissions testing procedures resulting in slowdown is car sales and a reduction in exports. Indeed the International Monetary Fund (IMF) has projected that the global economic growth will slowdown from 2.9 percent to 2.5 percent during the forthcoming year, viz 2019. Such a slow down in economic growth next year is being construed as significant.
On late Thursday evening, the Brexit conundrum continued to play havoc with British politics. Pound Sterling value has been reported to have slumped when Brexit Secretary Dominic Raab announced his resignation. Followed by Raab's resignation, the well-known Brexit supporter Jacob Rees-Mogg is reported to have joined calls for a vote of no confidence in Prime Minister Theresa May. Moreover, Tory Vice Chairman Rehman Chisti resigned his posts over the Brexit issue. Thus global economy and political uncertainties now abound around the globe.
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