Price decrease induces buyers to become boldly active; crop shortage on global level stabilises market by weekend

Downward trend in rates attracted buyers to lift to their hearts content. Spot rate opened at Rs 5200, while it was at Rs 5300 on the last day of the week.
WORLD SCENARIO
China's domestic need continued to be replenished, Chinese mills too laid hands on quality cotton, but perception that price trend showed steady fall until it was to touch the level 60 cents a pound. China signaled it was no more interested in buying until April next-prices are certain to turn more favourable then. India was expecting bumper crop, but untimely rain interrupted its plan to export.
Mills called for keeping in mind needs of the textile manufacturers. The prices losing value gradually also caused reservations. Pakistan expecting bumper crop had to submit to circumstances, as millions of bales had to be dropped owing to weather and other factors. However, the players are predicting the production size would be pretty low to support global price keep rising. Major buyers' decision to stop buying meanwhile is to put pressure on cotton price to be favourable for the consumers to around the level from where it soared to $2.27 per pound.
On Monday the NY cotton futures finished with small gains on buying by small investors although fiber contracts were off their session highs after initial advances ran out. The key March cotton futures rose 0.48 cent to end at 91.35 cents per lb, moving from 90.85 to 92.81 cents. The range was almost comparable to Friday's 90.01 to 91.89 cents band. Total volume traded on Monday was over 9,600 lots, almost 60 percent below the 30-day norm, preliminary Thomson Reuters data showed.
On Tuesday the NY cotton futures settled higher on investor short covering, as the market rebounded from an early fall to a 15-month low, and analysts said the market should consolidate in the days ahead. The key March cotton futures rose 1.40 cents, or 1.5 percent, to end at 92.75 cents per lb, near the top end of its 88.50 to 92.94 cents band. It was reported that the session low in March of 88.50 cents is the lowest intra-day level for cotton's second position contract since the start of September 2010, Thomson Reuters data showed. Total volume traded on Tuesday was over 17,600 lots, a quarter under the 30-day norm, preliminary Thomson Reuters data showed.
On Wednesday the NY cotton futures settled easier on investor sales, as the long-running economic crisis took its toll on fiber demand, as cotton contracts lost almost 10 percent of its value in the month of November. The key March cotton futures fell 1.84 cents or by almost two percent to finish at 90.91 cents per lb, trading from 90.70 to 93.67 cents. Total volume traded on Wednesday was over 14,700 lots, nearly 40 percent below the 30-day norm, preliminary Thomson Reuters data showed.
On Thursday the NY cotton futures settled firmer on buying by small investors in a range-bound market and fibre contracts are seen drifting into the weekend given a lack of leads at this time. Key March cotton futures rose 0.39 cent to finish at 91.30 cents per lb, trading from 90.83 to 92.77 cents. It was an inside day since the range was within Wednesday's 90.70 to 93.67 cents band. The market has staged a modest rebound since hitting a session low of 88.50 cents on Tuesday in the lowest intra-day level for the second position contract since the start of September 2010, Thomson Reuters data showed. Total volume traded on Thursday amounted to more than 12,500 lots, almost 50 percent under the 30-day norm, preliminary Thomson Reuters data showed.
On Friday the NY cotton futures ended the week with modest gains in the middle of a lower range amid light volume, as mills work down their inventories. Key March cotton futures closed 0.54 cent higher at 91.84 cents per lb. It set its second inside trading day in a row, meaning a lower high and a higher low, as the range narrowed between 90.92 to 92.27 cents. Analysts said they think the sideways range developing since November 21 is setting up for a break to the upside. An attempt to push lower on November 29 failed and light but consistent buying has kept cotton supported. On Friday, volume was especially thin at around 6,127 total contracts, close to 75 percent below the 30-day average, according to ICE Futures data.
LOCAL TRADING
The ginners relaxed offers lead to sales over 4000 bales, prices ranging between Rs 3800 and Rs 5300. Official spot rate was unchanged at Rs 5200, seedcotton in Sindh ruled at Rs 1800 and Rs 2300, while in Punjab phutti ruled at Rs 2000 and Rs 2600. Cotton arrival was smooth and consumers felt considerably relaxed, imports may not be necessary.
On Tuesday 13,000 bales of cotton changed hands at Rs 3700 and Rs 5500. Seedcotton prices in Sindh ruled at Rs 1800 and Rs 2300, while in Punjab were quoted at Rs 2000 and Rs 2600. KCA raised the spot rate by Rs 100 to Rs 5,300. The rates globally also ruling easy impacted uncertain world conditions. The sellers are approaching bank so that growers could get their cotton prices without any let up.
On Wednesday increased demand for cotton aided prices to remain firm. Spot rate stayed put at Rs 5300. Buying maintained 30,000 bales of cotton level in price range of Rs 3800 and Rs 5500. Seedcotton in Sindh ruled at Rs 1800 and Rs 2300, in Punjab phutti prices ruled at Rs 2000 and Rs 2600. The textile exporters who worked hard are worried, as shipment were bound to held up owing to three days closure. The loss, exporters said would amount to $4 million and around.
On Thursday prices turned a bit soft despite buyers mopping up available lots. Spot rate stayed unchanged at Rs 5300. In Sindh seedcotton was marked at Rs 1800 and Rs 2300, while in Punjab it ruled at Rs 2000 and Rs 2600. Falling prices encouraged buyers to lift 27000 bales in prices at Rs 3700 and Rs 5400. Market sources said falling value of local currency versus dollar is also a factor why buying in bulk is seen today.
On Friday shortage of cotton in the international market due to several factors and owing to long-weekend ahead of Muharram holidays strengthened the local prices on the cotton market. KCA official spot rate was unchanged at Rs 5,300. Prices of seed-cotton in Sindh were at Rs 1800-2300 and in Punjab at Rs 2000-2600. In ready dealings prices went up as approximately 40,000 bales of cotton changed hands at Rs 4,000-5,450.
On Saturday both buyers and sellers adopted cautious attitudes on the cotton market ahead of Muharram holidays. KCA official spot rate was unchanged at Rs 5,300. Prices of seedcotton in Sindh were at Rs 1800-2300 and in Punjab at Rs 2000-2600. In ready dealings prices showed no major change as approximately 16,000 bales of cotton changed hands at Rs 4,000-5,400. According to the market sources leading mills and spinners were on the sidelines just to see fresh development of rising phutti arrivals after the holidays.
PCGA DECIDES TO CLOSURE DOWN GINNING UNITS
How to keep interests of all cotton and textile sectors seems authorities are solely unaware of. Or their eyes cast away to election days when some other party is bound to take over. Authorities can resort to assigning TCP to enter market as so-called second buyers. In the present case, as is hinted TCP for some reason, may be busy procuring fertiliser and like inputs, so far has stayed away. The result is that the PSGA called for TCP as second buyer, second time within days. The complainants have again been pointing out who is causing loss to the growers and ginners.
The authorities in knowledge of the textile sectors are keeping a distance for obvious reasons. The textile ministry should try to prove its existence by not merely intervening, but removing the dents, here and there. It is unfortunate that for decades cotton and textile exports serving economy and keeping country somehow moving. But the sectors constituting, as a whole, have lived through unease and at odds with each other looking someone to cure their ills.
The TCP indeed has been asked to act as second buyers. This is to ensure that growers and ginners may be at safe distance from loss. But what is the guarantee the TCP will not lose in the process? Whose loss the ultimately be? Is there anyone who can work out a way free of damage for no one. The moment may not be ripe today but contestants will realise tomorrow country is the ultimate loser!
'GINNERS' PLEA FOR RESCHEDULING LOANS
The ginners were perhaps trying to escape this day when they would be coerced by condition to humbly beg for rescheduling loans. The volatile condition locally and internationally that were affecting prices unfavourably, the ginners were calling quarters for help foremost being induction of TCP politely rejected in view of the scarce resource.
As alternative being only one, SBP - was approached - but the dreadful moment when payment is unavoidable imperceptibly come staring into eyes. Ginners, however are not the premier bank with authority to get printed billion and billions of notes. Naturally a different plea is found-not always acceptable to reschedule payment. The ginners cash strapped, as the country is, they nearly fix payment pace according to space bank unwillingly allows. The response of SBP is hopefully awaited, which is not disbursed as and the way loanee considers desirable. The premier bank has presently grievance in courts to recover favoured money long back was in bank under cover of write-off. In this case, it is hoped and prayed, ginners will get the relief they were seeking.
TEX EXP WORKING CAPITAL SHOULD NOT BE BLOCKED
The hard days country is faced with today, relevant authorities should be conscious that various textile sectors are in need of liquidity. But problem of such nature exporters are faced with authorities seems to have no knowledge whatsoever. Nearly Rs 25 billion working capital of textile exporters is stuck in various drawback regimes in jeopardise country's exports and hurting national economy, said Rana Arif Tauseef PTEA chief while addressing the members of the Association. Tauseef reminded after the phase out of textile quota regime, exporters were allowed research and development facility to help boost exports, he said adding the facility was discontinued after two years in 2008. Some refunds under this head were still pending and exporter's capital funds were blocked creating difficulties in business flow, he said.
This was not all-another scheme of draw back of local taxes and levies were announced in 2009. The textile exporters responded positively as a result-exports jumped to $24 billion plus and of textile to $ 13 billion plus. However, he endorsed appeals from other sector to allow textile sectors to operate on full capacity, or else see the value-added sector contributing maximum forex and generating the largest employment slowly skidding towards collapse due to loadshedding of electricity and gas and shortage of water.
INDUSTRIALISTS ASKED TO REFUSE PAYING POWER BILLS
This is the last thing industrialists could be persuaded to impress refuse honouring power bills submitted to them for payment. The call was not without substance to get at the right place. The KCCI president Mian Abrar Ahmed quite obviously badly hurt, as colossal production losses of billions of rupees owing to 12 hour long loadshedding in seven industrial town associations. Unless loadshedding of power (gas), announced or without one, was managed, sources close to textile manufacturers and exporters politely suggested some way should be found so that exports of textile products smoothly continued for the progress and prosperity of the country in lurch.
Undoubtedly the industrialists do have their own interest, rear children, serve them and other family members, healthcare and education plus social obligation to live in peace with respect. Thoroughly perturbed the KCCI covering its affiliated seven industrial town associations chief said were on the same page over the loadshedding issue.
Unless authorities come out of such feelings that government preceding them were cause of the rot and coming ones will have to take care about deficiencies or deprived people won't take too long to find some way out.