Prices on domestic market rule favourable to buyers, spot rate reduced to Rs 8,500

The most of the week days cotton prices ruled favourable to buyers who, but for hope for further erosion, buying remained restricted, covered greatly by the cotton exporters who took advantage of price slide. The spot was down at Rs 8500 and stayed firm until closure of the week.
WORLD SCENARIO
The cotton futures beset with ill effects of drought and floods such as in Texas Georgia and Mississippi expected to push prices upward but due to uncertain conditions in N Africa and Middle East and Japan being worst hit due to earth quake and Tsunami. Experts say, how long Japan the third most progressive country will retrieve to its normal self is impossible to predict.
The good news chasing world from Argentina, Brazil, Australia and some other countries that supplies have begun and will maintain same for long. About America, players have been eyeing on rains in December in Texas for some recovery will add to supplies and impact prices. China is not in a hurry itself, good enough producer and yet ready to haul from anywhere cotton is lying surplus. India is second largest producer of cotton, with Bt cotton helping to catch up above 32 million bales. Abrupt rains pulled India back from delivering over one million bales under accord, which has but worse Pakistan affected by flood damages to crops and infrastructure.
Huge amount of water drained out into sea consequence of absolute indifference on the part of authorities to enrich agriculture potential by engineering always suffering from dearth of enough money. Bt cotton, which has made countries, like India to catch up with the top exporters is now being talked in Sindh. God bless Bt cotton gives so much that opens eyes of Pakistan who always have to drain tons of dollar on imports of cotton annually.
On Monday the US cotton futures settled higher on investor buying, as talk that there would not be enough cotton to be delivered in the spot month stoked a strong advance. It was noticed that the ginners have already earned profit, when prices touched the all-time high level at Rs 14000, in the meantime, fine quality is still fetching the highest market rate. Some analysts said that to make up the supply gap, the textile sector still needs one million bales of cotton. The key July cotton contract on ICE Futures US increased the six-cent daily limit to end at $1.5115 per lb, with the session low at $1.4518. The new-crop December cotton futures rose 4.42 cents or by 3.8 percent to finish at $1.2003 per lb after moving between $1.1479 and $1.214. Volume traded stood around 12,800 lots, over 50 percent below the 30-day norm, Thomson Reuters preliminary data showed.
On Tuesday the US cotton futures settled higher on investor buying, as talk there will not be enough cotton to be delivered in the spot month fuelled the contract's surge. Benchmark July cotton contract on ICE Futures US increased 3.89 cents to conclude at $1.5504 per lb, dealing from $1.5083 to $1.5786. New-crop December rose 1.10 cents to finish at $1.2113 after moving between $1.17 and $1.222. Volume stood at around 16,600 lots, a quarter below the 30-day norm, Thomson Reuters preliminary data showed. Traders said top merchant Allenberg was supposed to have decertified the cotton it took delivery on in the May contract, causing certified cotton stocks to fall the past few sessions. The failure of the July contract to race past the topside target of $1.60 could see the market falter.
On Wednesday the US cotton futures finished with strong gains, as traders feared the cotton being readied for prompt delivery would leave stocks depleted for the July contract once it expires. Key July cotton contracts on ICE Futures US jumped 4.82 cents to finish at $1.5986 per lb, a three percent rise. It traded in a higher range from $1.5530 to $1.6080, a level last seen on April 26. Volume climbed to around 20,000 lots, but remained below the 30-day norm, Thomson Reuters data showed.
On Thursday the US cotton futures settled sharply lower on investor profit-taking, as the market seemingly took a breather after its recent advance, with players mulling the next move in cotton before the weekend. The key July cotton contract on ICE Futures US dropped 4.21 cents to close at $1.5565 per lb, dealing from $1.5386 to $1.6132. New-crop December fell 3.79 cents to finish at $1.1919, moving between $1.1698 and $1.2339. Volume stood around 12,300 lots, about 45 percent below the 30-day norm, Thomson Reuters preliminary data showed.
On Friday the US cotton futures settled mixed, as fibre contracts languished and players mulled what market direction next week. The key July cotton contract on ICE Futures US shed 0.04 cent to close at $1.5561 per lb, dealing from $1.5006 to $1.5702. On the week, the market's benchmark contract is up 7.21 percent. New-crop December rose 0.57 cent to finish at $1.1976, moving between $1.1711 and $1.2024. Volume stood around 11.300 lots, almost 50 percent below the 30-day norm, Thomson Reuters preliminary data showed.
LOCAL TRADING
Modest trading was witnessed on the cotton market as the millers and exporters indulged in buying to meet immediate needs. The opening day saw no change in spot rate, while phutti prices low type ruled at Rs 2500 and Rs 3000 depending on the quality. Nearly 27000 bales of cotton changed hand priced around Rs 7500 and Rs 8650. The supplies from Argentina, Brazil are on stream but locally prices stayed as firm despite buyers hope things may change.
On Tuesday trading maintained low pace leaving prices ranged bound. Spinners vexed by depressed return wait for days to see decline in cotton price, while sellers stay adamant to hold prices firm spot was unchanged at Rs 8500, low quality phutti in Sindh and Punjab was doing at Rs 2500, while superior quality ruled at Rs 3000 sales dipped to just 2000 bales at Rs 7500 and Rs 8500 depending on quality.
On Wednesday rising trend spilt into market exposing the global development. Cotton crop in the largest producing country America is facing adverse weather condition in Texas, Georgia, in Mississippi affecting adversely production, however spot rate was left unchanged so was nearly unchanged phutti in Sindh and Punjab. Nearly 3000 bales of cotton changed hands at Rs 7300 and Rs 8500. The surge could be grimmer had production is Brazil, Argentina, Australia and India not been as desired.
On Thursday trading activity improved despite prices which stubbornly stayed firm under global impact mainly. Spot rate and cotton seed prices ruled unchanged slight upward trend was marked in buying which was 4000 bales in price range of Rs 7300 and Rs 8500. The cotton buyers are slightly reluctant also because the sellers are holding back quality lots in hope to gain when prices will look up in days ahead.
On Friday as a result of sharp fall in the NYE cotton futures, activity slowed down as leading buyers kept to the sideline, expecting sympathetic decline locallyy, official spot rate was unchanged at Rs 8,500. In Singh and Punjab phutti price of low type was at Rs 2500 and that of superior type at Rest 3000. In ready business, around 1600 bales of cotton changed hands between Rs 7,500-8,500. Many analysts were of the view that news about better cotton production in the coming season the world over appeared a cause behind the ginners' haste in cotton selling.
On Saturday strong mills and exporters' buying pushed the prices a bit higher. The spot rate was unchanged at Rs 8,500. In Sindh and Punjab, phutty price of low type was at Rs 2500 and that of superior type at Rs 3000. In ready business, over 10,000 bales of cotton changed hands between Rs 7,350-8,600,
ONLY HURDLE REMAINS WTO WAIVER
In Pakistan textile exporters viewed EU members and parliament so hurdle to duty free access into the EU. They had taken for granted. Where Pakistanis worried the package was most likely was the WTO, Pascal Lamy, its an earnest chief expresses on every aftermath of talks, conferences and meetings his organisation cannot possibly see the next year since 2001.
Once again the quite friendly EU has expressed optimism that, the EU parliament has waved green flag and the WTO will have no hesitation to grant waiver. The friendly union in very optimistic posture okayed saying no hurdle in the way of trade package to Pakistan. But the Pakistanis while lacking assurance easy seized the opportunity to remind the package was held twice supposedly by on the objection of Pak next door neighbour.
On pleasant gesture signalled by the EU parliamentarian according to an official the EU remains hopeful of getting the waiver approved by the WTO. The Pakistanis here are thunder bound over the optimism of official. The total worth of export of these tariff is around 1.03 million. Pak global exports of these products are $3.80 billion it was heartily welcomed by the gainers first when the EU announced the package being sent to WTO where it saw waiver certain.
BT COTTON NEWS: THIS TIME IN SINDH
The problem that leads to patronising BT cotton in Pakistan has never been discussed in apprehensible manner. Over a decade back this was in news from America such a miracle cotton - BT cotton has been tried and found high yielding and is safe from diseases and pest etc. Wherever cotton was grown and quantitatively more cotton bales for manufacture and sales of textile products, leading among them, India and China bought requisite BT cottonseed and found praise attributed to it approval.
In Pakistan, however, news about bid to try and gain has been a hush-hush affair Thank God, BT cotton use this time more soundly in Sindh has been reported. The growers are fed up with annual grow of just 3.2 million bales or around to 5 million bales. In a whisper some months back BT cotton was referred with the floods that had ravaged the cotton crop. With the cotton crop that escaped washed away BT cotton found no mention.
The latest report with a degree of confidence reads "the Sindh agriculture department has regularised use of BT cotton varieties to boost production" means thus far no determined efforts were made. Since, Sindh agriculture department is serious this time a spectacular result is expected. The BT cotton what has not been spoken about is that it has two excellent qualities for which cotton consumers in Pakistan feel bound to import cotton worth billions of dollars from any country has cotton in surplus. Had BT cotton grown successfully in Pakistan why on earth Pakistan had to be deprived of over one million bales agreed by India to deliver months back? Why Pakistan at all approached India bought disappointment in return.
APTMA'S PLAN TO ADD 6,000MW IN 3 YEARS
Since suggestion presented to generate power in confident tone pushes to find out why the idea came so late. According to the suggestion power generation capacity can be raised by 6000MW in three years if 10 percent energy development levy is imposed on lifeline consumers to generate fund to the tune of $6 billion what additionally infuses happiness through veins is that even cheaper energy could be produced. Thus high cost of doing business could be eliminated for sure and forever.
The hands-tight sort of pretext rulers unhesitatingly hurl on the suffering people, agriculturists and industrialists, should have given insight to do away with the long lingering pestering problem. The easily available fuel to the sugar millers prompted them rightly to produce power and say good bye to the outage loadshedding and breakdowns as far as possible.
They may sell power provided they have surplus power to the needy industrialist and others. The APTMA's plan in advisory board will be needed among the representatives from four provinces, power sector and industrialists the highest tax payers in the country. It hinted to impose 10pc levy on lifeline consumers consuming over 1,000 units per month enabling country to generate around $2 billion per month. The money will strictly be reserved for development of energy infrastructure. The APTMA wants advisory board be given task to find out a way forward from current crisis.
MILLERS TARRY FOR DECLINE, COTTON EXPORTERS POUNCE
Trading in cotton during the week surprisingly favoured for the textile exporters, but exporters robbed the most gains. While cotton consumers waited for yet more fall, cotton exporters seized the opportunity to buy their needs.
The cotton exporters generally stay on the sidelines for suitable price line to satisfy the needs of importers in Bangladesh, Sri Lanka and thirsty guys. The spinners were exceedingly cautious, as cotton prices under impact of worse off conditions in Africa, Middle East and Japan kept easy tone, hitting the yarn makers. The textile exporters, initially restrained looking for yet more easy condition, and always ready to export against orders in hands.
Encouraged by gradually and cautiously sustained rise in textile exports, authorities have started taking about overall exports earning of over $24 billion, inclusive of products Sialkot had to offer. The spot rate cut by Rs 500 on the very opening day that sustained throughout the weekdays poured additional courage for the otherwise cautious exporters.
The world has been counting on fingers how much to plant during 2011-12 season, looking at the situation, which economists do not see is very encouraging.