Both the cotton sellers and buyers generally avoided deal but ginners seemed worried about pending stocks they used to claim was manageable. Spot rate was adroitly held unchanged at Rs 2660 until Closure of the week.
WORLD SCENARIO:
The USDA reports usually do effect change but the past week, other crops surge pushed cotton futures either way. The opening day July contract rose by 0.50 cent to 51.92 and October went up by 0.70 cent to 55.70 cents a pound. The opening session opened marginally higher as govt report was ignored but surging other crop prices.
The traders' perception is fully optimism for better days. Meanwhile USDA forecast US cotton output in 2007 -08 unchanged at 18.8 million (480 lbs) bales. World consumption was reported slightly higher to 127.41 million bales. The production was placed at 115.89 million bales.
The futures deflated in second session as small spec and switch trade indulged in sales. The players were expecting more roll overs, the first notice day being not far away fundamentally the market is monitoring the development of cotton crop in the US.
On Wednesday switch trade and spec buying pushed futures higher. Open interest in July contract fell 10.346 lots. And the market is turning to USDA weekly export sales report, but planting average due on June 29, seems to fix a direction in cotton trading. Brokers see total cotton sales to be in the range between 150,000 bales to 250,000 bales. Shipments were being expected at 4 to 500,000 RBS.
On Thursday futures registered glorious rise at a 3-month high. The change was brought about by talk that China was about to place orders. America is today worried about import orders from anywhere. India has started supplying China, China itself has switched over to Bt cotton besides natural one which gives higher yield. Hence when China delays putting orders the US feels out of sorts. However weekly export sales were down to 185,000 RBS and shipments were 451,000 RBS higher than previous week.
On Friday futures rose to their 15- years high a fact that proved trade hope that scenario change was expected. China's entry into the market was said to be imminent. Monday is a day far when crop report will be reported. The report often brings about change in activity. However July was up 0.92 to 54.92 and 0.82 to 57.90 cents a pound.
VOTE SAKE, AGREED:
Sickening demand for package amounting to billions by needy people who sell or "more respectable tone" exports particularly textile products prompted govt to do unprecedented sort of favour to those who have no alternative death than to rub shoulders with high ups in country's capital.
This change of scenario had to come from blues as earthly being in this country hear the loudest voice for that one needs to rub shoulders with size and stature.
The promised people of this country had longed for big favour called package to come with 2007-08 budget was shockingly missing. Surprised, as they were, perhaps they looked around who had promised package containing billions had been dumped in cold storage despite record temperature being recorded these days for weeks. Threat had come in sugar coated words that only package could hold exports from going down the drains which has just picked up from decades old tradition of $5 billion forex earning.
The way State Banks mere explanation had left some foaming for pointing to truth instead of holding nerves and improved working and optimise export prospects. Have not they enjoyed enough and varieties of exemption, drawbacks, write offs and shake hands in uncalled for meetings and conference and visits to far off Europe and America. May be Rs 600 raise in labour cost has unnerved people beyond holding hack self, the knowledgeable circles sunken in polite thinking said. They said such favours in decades or like days had come should have given ground to them to commend govt for opening their eyes.
And then they should have sung old song of package. He is no more in the world otherwise he could be quoted who, when he became PM had taught him ways to live and let live and this country was soon quoted on top of corrupt nation.
Malthusian theory when man fails to help himself God comes to his side. There is time still to ponder what Malthusian theory holds the message in these few words. This country has gradually been coming out ill will of world thinkers watching our behaviour! The favour comes vote sake yes but did such favour came ever before!.
On Thursday modest trading was observed. Around 4000 bales were finalised between Rs 2550/2700. Budget expectations were still awaited.
G8 ENDs WITH CUP OF TEA:
Year after year the industrial nations meet to solve poor men's problems like hunger, medicine and education, as they announce before every meeting- but end up in elaborate discussions on currency, new missile tests or their installation. Along with the meetings come reports about disgruntled supporters of poor and poverty which have survived despite occasional large-hearted attempt to do away with them. Papers on Thursday (June 7) carried a photograph of a field in Heligendamm (Germany) buying their muscle to break through a fence erected near the venue of G-8 summit.
The WTO victim of chilling in difference was not touched keeping in view special meetings and conferences are enough to avoid and delay as far as they could. G-8 invited rebuke for bush as he presented unqualified man Russian President Putin as a leader of the world. Instead of concentrating on taking it as side issue the WTO with positive developing countries must accede more and even more.
The way developed countries persist in asking from poor countries to concede more grounds. The intention gets clearer that somebody must come with a decision that regional and similar accords are enough to see developing countries helping themselves and formal okaying to WTO deal has no meaning. As the mentors do pronounce the WTO would bring smiles on every ones lips in its true form they would really he so.
But after about a decade of accord bids with like-minded people the bigger size of WTO has become horrible. Or the mentors must clear their vision about a happier world and induce themselves to give enough to quality the global trading if they cannot give all to poor.
The sources watchful of the developments are hardly hopeful mentors are in a mood to see WTO succeeded. For the protestors on meetings and conference time whether to continue to protest for mere satisfaction that they are exercising their muscle, as quite obviously weaker ones cannot do anything, else.
SUBDUED HIGH COST OF DOING BUSINESS:
The govt has not left much to nag about 2007-08 budget, perhaps and it perhaps has taken away much of the music high cost of doing business used lately produced. The exporters more so the textile exporters have been given what is required to achieve the lost share in the world markets. But reports comments and interviews hardly contain a word of gratification.
What least would be expected after the budget that so called aggrieved people will have quietly accepted offers rather than boarded a roaring and soaring PIA jet to Islamabad. But there is no indication that all stake- holders have tightened their belts to achieve 10.9 pc growth to qualify future generous rewards. There is also no mention of so much loved words like high cost of doing business since the day budget was announced. Lately, for the last few months exports declining progressively used the phrase were generous for decades and mention of the words was useless exercise.
With noise or without the shock is being felt, what however, has not come from govt or the exporters high cost of doing call to that enough is enough. New textile towns, cities dyes and chemical cities plus textile machinery producing plants should immediately be started as sure way to get such words like high cost of business for gotten for ever.
The sources once again made a call to stop billions and billions of dollars from draining whether tonnes of chemical cost of business.
LET ADVICE WORK: Over six decades in manufacturing and exports business should be well aware of the needs to deliver better service to country and its poverty ridden populace. Even that part should not remain off the eyes which hurt and damaged to them and already sagging economy.
But, what had been happening? According to some of them, in stead of concentrating on developing ways to improve efficiently, manufacturing and exports, depended entirely on authorities who had power to drain them to any purpose even without any purpose sources, who had watched the exports condition which practically had refused to budget often drew the attention of relevant people to see the countries in close by countries leaping and improving their exports earnings without as much potential Pak and exporters of this country had at their command.
But no one neither in the govt nor among exporters paid heed, in stead concentrated on importing left and right even material that had been given by God to this country, in this case cotton and so much welcome at one bread and a cup of tea. These labourers were not to be searched and found at great cost but on the doorsteps of manufacturing mills. The result was that product of unskilled workers could ensure $5 billion annual in forex earning and both authorities and exporters celebrated until very lately and not to mention caused by the advent of sickly WTO.
But what actually has commerce the other day advised the relevant people to improve working and annual earnings. He was earnest in urging the industrialists to focus on research, value addition, modernisation and training of manpower. He perhaps also knows that his urge is not meant for new industrialist. The world-over industrialists muse when such reports and advice come in their view. For a moment they must take it for granted that advice must have been for movie, new comers are liable to make mistake of ignoring these. Take for example research must see before industrial set up of particular types is being planned, similarly value additions hints were being dropped ever since textile mills had come into being. But all these cause money and is expected to come from govt. of course Pak industrialists know modernisation and it is done no every thing that has prospect of imports appeals to the industrialists. Let us wait and watch whether minister's advice has been headed!
LOCAL TRADING:
Trading in cotton moved slowly, deals struck on alternative days while ginners were struck by a degree of disappointment. The idea they had formed about their stock, which they thought was manage-able got out- let only in days. Spinners and millers had good information about crops in the fields. They believed the stock with the sellers were a burden on them. They will be soon offering cotton at favourable price to avoid losses.
However, the opening session was disappointing for sellers and the buyers stay away lifting no cotton. As a matter of fact both the buyers and sellers were stuck up with announcement of budget which was expected to contain measures that could benefit both in one or the other ways.
The second session too was as dull with said to be only one deal struck. But hopes were on both sides alive to emerge some ground to give them benefit. The buyers were not worried as good crop was expected in three four weeks or so and imported cotton was also in the pipeline. But the ginners were in a position they could neither sell cotton at throwaway prices not could hold back and allow to rot.
On Wednesday nothing had change except that one deal came to a great relief to the ginners priced at spot rate level and was said to be between exporters and mills. The episode that ginners had to repent on their stubborn attitude for not selling cotton reasonably good price. And now even that price is not being offered buy the buyers. The time will save the fate ginners ultimately met.
On Friday reports said market trend was firm. The market operators saw the surge in international cotton prices as aiding. The sentiment has prompted consumers to step up buying. Saturday went by as an event less day.
TAIL PIECE:
The number and weight of textile machinery chemical and dyes have gradually been missing from reports. Nothing for sure he said as this attempts seems to be deliberate bid or reporters are desisting from exposing these for some reason. These columns have been pursuing why these things are not being manufacturing locally to save textile sector from unending nag about high cost of business.
It was great to have come like flash in the wake of reports about textile cities etc chemical city is being planned in Karachi and elsewhere. Today cement city and marble city is heard. It is presumed that textile city and garments city all have either busied in the wake of strong opposition to these. Karachi Nazim was also interested in Textile City but he too seems to be lost initial enthusiasm. New industrial estates have been hinted.
These perhaps have not so far tasted the gains industry has from imports of everything. The international custom has given some insight. But authorities seem to be taught ABC of the misuse being committed since over six decades. The manufactures have been coming forward due to huge investment they cannot hear. But they never seem to be anywhere calling this venture impossible. The chemical supplement 2006 should prove an eye opener besides sugar manufacturing plan exports have not been reported after one to Bangladesh.