Uncertain price movement, supply from India in doldrums keep transaction under pressure

The textile value added exporters seem to be in tight corner on price front locally, India is not so far clear whether or not supply held up one million bales contracted. Spot rate seen -at Rs 9,900.
WORLD SCENARIO:
The recently concluded cotton industry conference Weltwide in Atlanta to wait for final say but some others saw US 2011 cotton sowings will be in the range from 12.48-12.53 million acres, a five-year high. So cotton will be gaining sowing boost in other countries also. Details in this connection could be available from NCC meeting in February 2011 in San Antonio, Texas when annual survey of farmers' cotton planting intentions will be released.
Cotton traders have meanwhile celebrated historic price surge seen in 150 years - or Abraham Lincoln's time. Dollar rise and fall influenced little during the week. Only a fortnight back Australia had been jumping out of mirth eyeing bumper crop. But flooding dampened the expectations. However, yield is considered to stay better than last years'.
China is today under inflation worry, as a result of which she is tackling by compromising on yuan and calculative is stock fashioning. No inflation sufficiently under control, China biggest cotton user is leaning towards rebuilding stocks. Pakistan seems to be at its wits end - India is not clear or whether it will supply one million bales contracted rate or at enhanced price. India was exported 16000 tons of onion under impression favour will buy favour thus.
On Monday the US cotton futures finished higher on speculative and possibly some mill buying, but business was moderate as most players awaited release of a key government crop report this week. Benchmark March cotton contract on ICE Futures US increased 2.65 cents to conclude at $1.4325 per lb, trading from $1.405 to $1.446.
On Tuesday the US cotton futures closed up the daily trading limit on speculative buying ahead of a US government report that is expected to show reduced supplies in China and a smaller crop in flood-ravaged Australia. The benchmark March cotton contract on ICE Futures US increased the daily 4.00-cent limit to settle at $1.4725 per lb, with the session low at $1.4315. Volume traded was 17,200 lots, over 50 percent below the 30-day norm, Thomson Reuters preliminary data showed. In its December report, USDA pegged China's cotton ending stocks at 13.22 million (480-lb) bales, unchanged from the preceding month's estimate.
On Wednesday the US cotton futures closed higher on investor buying, boosted by a strong grains complex, a weak dollar and a rally in equities after a strong debt sale by Portugal. The key March cotton contract on ICE Futures US rose 0.72 cent to settle at $1.4797 per lb, having briefly hit the five-cent trading limit at $1.5225. The session low was at $1.477. Volume traded was around 29,000 lots, more than 60 percent above the 30-day norm, Thomson Reuters preliminary data showed.
On Thursday the US cotton futures settled sharply lower on investor profit-taking and producer sales ahead of a holiday weekend, with analysts saying the overall outlook for the market remained bullish. The cotton market will be shut on Monday for the US Martin Luther King Jr. Day holiday. Trading reopens on Tuesday. The key March cotton contract on ICE Futures US fell 3.91 cents to settle at $1.4406 per lb, dealing from $1.4397 to $1.5163. Trading volume totalled around 25,000 lots, almost 40 percent above the 30-day norm, Thomson Reuters preliminary data showed.
On Friday the US cotton futures settled lower follow-through investor profit-taking and after No. 1 consumer China raised banks' reserve requirements, which could cool growth and hit cotton demand. The cotton market will be shut on Monday to honour US civil rights leader Martin Luther King Jr. Trading reopens on Tuesday. The key March cotton contract on ICE Futures US dropped 2.62 cents to settle at $1.4144 per lb, dealing from $1.4119 to $1.4595. or the week, the market gained 0.5 percent however. Volume amounted to 20,700 lots, about 12 percent above the 30-day norm, Thomson Reuters preliminary data showed.
LOCAL TRADING:
In ready modest trading in cotton marked, as Indian information poured this side of the border, full of hope one million bales of cotton will be supplied at the old contracted rate. Total sale seen was 7000 bales in price range of Rs 9700 and Rs 10,000 above. Spot rate was unchanged at Rs 9800. Sindh and Punjab saw seed cotton ruling at Rs 3900 and Rs 4550.
On Tuesday business in ready rose to some 12000 bales of cotton in price range of Rs 9600 and Rs 10,000, above spot rate. The cotton rate today is strictly fixed in view of the rise and fall in the world trend. Spot rate was held at Rs 9800 and seed cotton in Sindh and stayed put at Rs 3900 and Rs 4550.
On Wednesday cotton consumers realised sellers were unprepared to bring prices down. The realisation resulted in boosting purchase to 20,000 bales in price range of Rs 9500 and Rs 10,200 much above spot rate, which stuck up at Rs 9800. According to the experts some one million bales are in ginning units, while same quantity is expected to be received from fields. Indian supply of more or less one million bales was unheard of till yesterday.
On Thursday spot rate was raised by another Rs 100 to Rs 9900. Spot buying dipped to just at historic Rs 9700 and Rs 10,200. Seed cotton in country was selling at Rs 3900 and Rs 4700. The slow pace of buying exposes Pak interest in Indian cotton still in process of being authorised. On Friday
On Saturday rates came down on the cotton market mills kept on the sidelines to observe latest development after sharp fall in NY cotton futures and imposition of the withholding tax on the agriculture products. Spot rate was unchanged at Rs 9,900. Seed cotton prices in Sindh and Punjab were at Rs 3,900-4,700. In ready business above 6000 bales of cotton changed hand between Rs 9,600-10200,
LAW TO CHECK HOARDING OF YARN, COMES TOO LATE!
The call of the textile sector ministry is quite old and resisted by commerce and finance ministries. How honest they could be is evident from the fact that backbone of the industry could earn for decades nearly six billion dollar. When a useful development came to surface. Textile ministry is coming and really came. But for a year or so it was hardly any initiative came despite the backbone economy had pending a couple of burning problem - yarn sales and exports acted like a truant boy to behave take over a year.
Months have been wasted over making sure yarn is available to value added manufacturers and exporters. That failure has enlightened ministry authorities that how to arrest the topsy-turvy going. The value added sector claims twofold and valid their earning per unit is far more than per pound value of raw or say semi raw material. The wider interest of country is so often said for what. Yarn, the knowledgeable sources have advocated should be made available to local manufacturers and exporters first. Or value added sector should be ensured its requirement and at a price not to lose with made up from Pak yarn.
The ministry has probably realised and is determined to make this point focal when an act is given a concrete shape. That should indeed be regularly monitored keeping in view how rules and laws are respected. If it is not general complaints that implementation evaporates from mind putting rules and laws in letter and spirit. Sources hope authorities are firm in view of the changing situation.
BOLT FROM THE BLUE FOR TEXTILE SECTOR
Any thing that speaks about or for the full of potential textile sector infuses enormous mirth it has been failing for decades. Datelined Manila and four banks complete trade transaction to support textile sector are resounding but the rest of the episodes unfold as sweetly as the dawn chorus. Four globally well known banks the Asian Development Bank, International Finance Corporation, Citibank and MCB Banks' leaders at grimly discussing and debating the depth of neither sinking nor floating Pak textile sector. All emerged light and determined that had coupled a landmark trade transaction that will boost the textile industry in Pakistan.
Ibrahim Fibres Ltd was heard beforehand with respect for venturing in polyester staple fibre and polyester chips helping textile products by saving tons of foreign exchange. But when about a month back in connection with noises local consumers were making about non-availability of polyester fibre and difficulty in importing. It was noted with regret that the Ibrahim Fibres Ltd. was for some time non-operational. Now the only name mentioned in the report said had provided trade finance coverage up to 110 million ($) to import German machinery to produce staple fibre and polyester chips. The enquiry whether IFL had started operation was not confirmed. However, one prays so should be the fact.
PLIGHT OF 170 UNITS IN MULTAN ALONE
The number of industrial units in Multan alone have been closed trailing backstage not any better show up in industrial hub of Karachi and Faisalabad and Lahore. Reason gas loadshedding. The rising cost of essential inputs make edge over the rival products, which already enjoy GSP-plus. The little favour that infused a lot of joy among Pak textile products, are anywhere close to go ahead has not been heard since favourable signal was sent to WTO for perusal and putting legal seal on it. India and some European Union had shown reservations with least minding plight of this country after flood that ravaged every thing that make life easy and worth living - houses, roads, bridges and even standing crops like cotton, whose products inject life into not very bulging economy.
The essentials for running industries are in abundance, but so far by and large such "misses" are either left for the coming government, or some exercises are made for obvious reasons, the result is that research moves hardly a yard away when they are bundled up. Thus elapsed over ten decades - with beggars' bowl with exception of early few years. The report mentions, also very poignant worthy to be noted that a gas company in whispers said "problem is the industry and CNG station owners don't cooperate" as a result company continues to suffering.
'MINISTER HAS NO REGRETS'
The authorities have to take some difficult decision that has to be welcomed if that is in the interest of economy and country. The federal textile minister, for the first time textile ministry took a stand as it had no regrets. Many may agree that by stressing mind is a definite way out to pull country in the desired direction.
It may probably be pertinent to cite examples of Singapore, Malaysia, China and India, which countries set on uncharted course along Pakistan. In matter of achievement one has to sift history that has made what they are and what Pakistan is today.
This ministry in neighbouring countries was given birth along all other monsters considering its immense significance, whereas in this country voice for textile industry floated in the thin air for over six decades. The finance and commerce ministries played proxy role. Who can fathom the depth of wrong done thus to exports of textile sector, mainly value-added sector, sources said. The first resignation in India as back as 1947-48 when a train in Assam met a minor mishap and the then Railway minister resigned. Today India is notching 9-10 percent growth. In Pakistan an authority has to regret for his best of intention behind a decision. The draft law of Federal Textile Board is in making. Let it be for good and good textile industry.