Cotton prices touch all-time high level at Rs14,000, spot rate at Rs12,000 in low volume of business

Cotton prices opened firm on the market, spot at Rs 11,800 but soon futures surge prompted sellers in Pakistan to raise spot rate by Rs 200 to Rs 12,000 per maund. Buying was restricted to 8600 bales until Wednesday.
WORD SCENARIO:
The much awaited plantings report, as dispatched by USDA showed big crop plantings in some agricultural commodities triggered hefty selling in cotton market. Huge US corn and soyabeans plantings this spring will likely fail to refill-razor thin stock enough to quell the surge in grain prices, USDA said. China imports 60 percent of the American surplus.
It has nearly exhausted stocks. In the meantime there is not yet any signal from 2nd largest exporter India, indicating resumption of over one million bales delivery to Pakistan. Cotton consumers in Pakistan had attached fresh hope after Indian cotton authorities had Pak importers to muster fresh contract a positive note. The much-awaited plantings report by the USDA showed big crop plantings in some agricultural commodities. Huge US corn and soyabeans plantings this spring will likely fail to refill razor-thin stock enough to quell the surge in grain prices, USDA said.
If India finally failed, which is more likely, Pakistan will be in deep drag because of unrest in African and Arab countries. Leading analysts saw stock markets down, grain down, so are speculators seeing their profits dissolved in view of unrest in the African sub-continent. The latest is that untimely rains dimmed chances of exports set earlier at 5.5 million bales.
On Monday the US cotton futures finished up the daily limit on speculative and trade buying, as the market stayed within sight of record highs, even though open interest slid to its lowest level in seven months. The key May cotton contract on ICE Futures US rose the seven-cent limit to finish at $1.9123 per lb, with the day's low at $1.8721. Last week the contract hit a record top of $2.1176 per lb. The cotton market rose nearly 40 percent on the month, posting its sixth monthly gain in the last seven months. But open interest in the market tumbled to a seven-month low of 174,935 lots, data from ICE Futures US showed. Volume traded on Monday though stood about 9,500 lots, some two-thirds below the 30-day norm, Thomson Reuters preliminary data showed.
Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia, said the open interest news should be seen as bullish because it meant the market has washed out investors who had ridden the bullish wave in fibre contracts. Besides, the US cotton futures rose by the daily limit for a second straight day on Tuesday as investors continued to bet on the commodity amid strong demand, led by top importer China and limited supply from India. The key May cotton contract on ICE Futures US rose the seven-cent limit to trade at $1.9823 per lb in early Asian trade, while China's Zhengzhou cotton gained almost five percent to trade around 33,100 yuan per tonne.
On Tuesday, the US cotton futures closed higher on speculative buying but profit-taking knocked the market back after it rose the daily limit. Open interest in cotton futures fell to its lowest level in seven months, as investors rotated out of cotton although market fundamentals still were seen as bullish given tight supplies and steady demand going forward. The key May cotton contract on ICE Futures US rose 2.37 cents to finish at $1.936 per lb, trading from $1.9157 to the seven-cent limit up at $1.9823. Last week, the contract hit a record top at $2.1176 per lb. Open interest in the market hit a seven-month low at 174,074 lots, as of February 28, data from ICE Futures US showed. Volume traded on Tuesday though stood about 32,300 lots, some 3 percent over the 30-day norm, Thomson Reuters preliminary data showed.
On Wednesday the US cotton futures ended up the daily limit on suspected speculative buying, but the trading volume was slow to begin and the tone of business lacklustre. Open interest in cotton futures stayed near a seven-month low, as investors dumped cotton, although market fundamentals are seen by most players, as still bullish, given tight supplies. The key May cotton contract on ICE Futures US rose the seven-cent limit to finish at $2.006 per lb, with the session low at $1.933. Last week, the contract hit a record top at $2.1176 per lb.
Open interest in the market stood at 175,406 lots, as of March 1, up marginally from the seven-month low at 174,074 lots, as of February 28, data from ICE Futures US showed. Volume traded on Wednesday stood at about 18,300 lots, some 40 percent below the 30-day norm, Thomson Reuters preliminary data showed.
On Thursday the US cotton futures closed higher on late speculative and trade buying, as the paucity in nearby supplies and steady fiber demand kept the market firm and near record highs. The key May cotton contract on ICE Futures US rose 5.10 cents to finish at $2.057 per lb, dealing from $2.006 to the 7-cents limit up at $2.076. Volume traded on Tuesday though stood about 26,800 lots, about 13.0 percent below the 30-day norm, Thomson Reuters preliminary data showed.
Despite the robust level of cotton prices, open interest in cotton stood at 174,733 lots, as of March 2, barely higher than the seven-month low at 174,074 lots as of February 28, data from ICE Futures US showed.
On Friday the US cotton futures finished up the seven-cent daily limit at an all-time high amid speculative buying, scarce supplies and signs that global economic growth is gathering steam in 2011. The key May cotton contract on ICE Futures US finished locked at the high of $2.127 per lb. The session low was $2.064. For the week, the market is up 15.45 percent, the best performance since 19.3 percent the week ending December 5. However volume was on the light side at near 22,000 lots, about 30 percent below the 30-day norm, Thomson Reuters preliminary data showed.
LOCAL TRADING:
Lean business was marked on the cotton market on Monday, as sellers were price-conscious insisted to be given asked amount. The sellers knew well world rate was slipping. However, official spot rate was unchanged at Rs 11,800. Phutti in Sindh and Punjab, too, was unchanged at Rs 4,000 and Rs 5,200. Nearly 600 bales of cotton changed hands at Rs 12,500.
On Tuesday cotton prices turned firmer, as world rates moved higher. Under the impression spot rate was raised by Rs 200 to Rs 12,000. Phutti prices in Sindh and Punjab rose by Rs 200. Nearly 2,200 bales of cotton was lifted in price range of Rs 12000 and Rs 13,000. Buyers were concerned about price hike countered by sellers saying supplies are short.
On Wednesday no deal was recorded in trading on the market, as soaring prices made consumers to wait until favourable time. They know rise is linked with world rates. Spot rate and phutti prices were unchanged. Delivery from India is now a foregone matter market sources expressed in subdued tone. They also forecast cotton buyers were likely to pay even more if prices maintained surge.
On Thursday, prices touched all-time high, as some buyers felt constrained mills can't be left hungry. Buyers lifted over 2400 bales of cotton at dizzy height prices ranging Rs 11,400 and Rs 14,000 per maund. Apart from what growers claim short cotton crop here, the global rate is also keeping at the seven cents limit - highest so far. The textile exporters apprehended exports might not keep pace that led to 26 percent better achievement.
On Friday official spot rate was unchanged at Rs 12000. Phutti prices in Sindh and Punjab were higher at Rs 4500-6000. Above 4000 bales of cotton changed hands between Rs 11800-14000 (two-month credit). The prices are stable and so the mills indulge in buying to meet the forward requirements.
On Saturday spot rate was unchanged at Rs 12000. Phutti prices in Sindh were at Rs 4500 and in Punjab rates were higher at Rs 6400. Approximately 8000 bales of cotton changed hands between Rs 12000-14000. According to the mills continued cotton buying to meet their future needs because it looks that prices may maintain their present pace in the coming days.
SUSPENSION OF GAS WILL SCRAP GAINS:
How all quarters quietly took it for granted that textile sector has shown tremendous growth in exports during first seven months of current financial year. The APBUMA gave specific figure at almost 26 percent worth $7450 million. In a few words, disappointing story was being narrated until the growth reached encouraging size. The sorry background kept holding faster growth on various counts including gas and power outages both in Sindh and Punjab.
With such deep constraints, keeping morale high and achieving 26 percent growth, most credit goes to made-up sector. Whether credit due to the textile minister, who somehow managed to streamline yarn manufacturing and yarn exports. However, a word seems here worthy to be mentioned, the textile sector had settled when government found it necessary to drop a tried person. The past had been thirsty of a textile ministry, despite the fact all neighbouring countries had textile ministry and textile exports were on the move forward towards visible prosperity. After nearly decades textile ministry was set up and with that a minister was appointed that got a change when probably that was not needed in view of the achievement. However, it is expected the minister will improve upon what his predecessor had achieved.
Need of the hour is that politics is shed and every input available will be employed to give yet another surprise that textile exports registered another phenomenal growth. And Sindh and Punjab both contribute what seems today difficult.
GAS LOADSHEDDING IN TEXTILE INDUSTRY:
Inevitably voices are louder to take industry in confidence, while framing policy. The answer from authorities to this effect is just a meaningful silence. The funny thing is that the victims are never seen making their voice louder yet. So that a solution really emerge. One by one, today gas and power load-shedding are a normal phenomena.
There is a general call of the taxpayers that they should be spared from pestering, as and when grounds emerge and reemerge. Instead, the voice today is touching sky-high to those who reap wealth and escape with a sort of lump sum and go to foreign countries for treatment and send children abroad for advanced studies and mostly why stay back for a better salary than their country can afford.
Sui Northern Gas Pipelines announced five days gas load-shedding, which began as per the announcement. In Karachi, case was a bit different - industries were affected in a different way so the businessmen and motorcyclists. The chairman Pakistan Hosiery Manufacturers and Exporters northern zone said that severe gas load-shedding was having negative impact on the textile sector. He specially mentioned Punjab in this connection. The chairman in effective way reached voice of over 600 industries, which he was confident, will close down and with that hundreds of workers will lose job.
ECC PART PAYMENT FOR KARACHI TEXTILE CITY:
Textile cities are like gradually sinking sound in the "long past," but do surface at gaps probably the components suddenly realise such vital projects need some respect, as it is given "national interest". Apart from which component, if there is one or more, indifference is deep. The originally planned orphan like "garment city" or even "textile cities" have gained more or less "quiet living".
Behind any project, the main component in this country is government contribution, which in this case has been much less and indeed paid less. It is known to all and much better why is kitty in such ominous condition. The September October floods would not have left behind trail of devastation had for the last 60 years kitty set apart money for vital projects. They would have yielded essential products instead.
Many will bear out that Pakistan was never in its life out for trade talks or joint ventures talked with confidence and obtained objects it had placed before it. After every couple of years, even today people talked loudly this country is passing through "worst time".
The textile city can utmost be seen to have ensured land needing confirmation whether it is ready for building construction. Similar activity was considered for reports ensuring textile city was not a dead issue. That the ECC will extend 1.5 billion government financing guarantee, so what, the sources close to the cotton and textile asked. They asked further to be informed that the city is ready and contributing to the economy. Naturally they asked for, is happening in these two places are pouring export proceeds into the government exchequer. They hoped answer would be in affirmative?