Cotton market displayed a slow but stable condition on Thursday with lint prices showing slight decline over the past one week or so. Seedcotton (Kapas/Phutti) prices decreased by Rs 50 to Rs 100 per 40 Kgs while lint prices declined by Rs 100 to Rs 200 per maund (37.32 Kgs). Ginners, however, were complaining that their cottonseeds (Binola/Kakra) and Khali (oil cakes) were not selling.
Mills sources said that though sales were slow but business was continuing and that the condition of their markets was steady due to forward sales they had made earlier. Mills appeared in no easy mood to sell their products hastily. Mills performance has improved because local lint has been cheaper over the past several months. Therefore, cotton and textile business keeps moving continuously. Recent improvement in power supply has also helped to improve the textile situation.
Seedcotton (Kapas/Phutti) prices on Thursday were reported to be lower and ranged from Rs 1,800 to Rs 2,350 per 40 Kgs in Sindh according to the quality and between Rs 2,200 and Rs 2,600 per 40 Kgs in Punjab. Lint prices were also lower and ranged from Rs 4,000 to 5,700 per maund (37.32 Kgs) in Sindh and from Rs 5,000 to Rs 5,700 per maund in the Punjab.
Cotton production output in Pakistan this season (2011-2012) many range on a record level from Rs 14.5 million to 14.75 million domestic size bales on an ex-gin basis. Local mills may consume between 14 million and 14.5 million bales this season. Exports may range from one million to 1.2 million bales while imports may dwindle in the range of half a million to one million bales.
Till the evening, reported cotton business remained slow in what appeared to be a quiet market. However, mills continued to hope and looked forward to further regularization and betterment in the textile business over the forthcoming months. In the evening, the quiet condition which started early this week continued to pervade the market. A cotton sale of 200 bales from Sultanabad in Sindh was reported at Rs 4,050 per maund (37.32 Kgs), while 400 bales were said to have been sold at Rs 5,700 per maund in Mianwalli in Punjab.
On the global economic and financial front, Eurozone affairs continued to slide further into deterioration and despondency because the Greek issue continued to remain unsolved. European leaders continued to divide Europe and appeared to be shattering any prospects of an early Greek revival. Whether the big bosses of the Eurozone have a hidden agenda or game plan to cast Greece out of the zone, it is not known. However, any bailout discussion regarding Greece was said to have been shunted till next week. Till the middle of this week, the European finance ministers were not coming out with a viable solution regarding Greece, the focal point which at present could precipitate a Continental catastrophe.
The Greek economy seems to be stuck in a rut and has deteriorated further by slowing down rapidly. It was thus axiomatic that the overall European economy would contract as it did during the last quarter of 2011 for the first time in three years. Italy has registered its second quarter of decline.
The downslide in the European economy has been very manifest. Last week Moody's cut the ratings and outlook of nine Eurozone countries in no uncertain terms. It sliced the debt ratings of Italy, Spain and Portugal and also put Britain, France and Austria on a watch list fearing that the definite economic decline in the Eurozone could even put the hitherto relatively less effected economies into serious straits. Now we have learnt that the Japanese economy also contracted during the last quarter of 2011.
All eyes are now on China where an American delegation visited this week to see how China cold assist in halting the economic decline in the Eurozone. It appeared that though the Chinese would do their bit to assist the Eurozone towards an economic and financial revival, but the Chinese refrained to spell out the modus operandi which could save the Eurozone from slithering further towards a fiasco.
Therefore, this week saw the European and American leaders lining up in China ostensibly seeking Chinese assistance for a contribution towards the Eurozone bailout fund. Itself both exports and imports fell in China signalling that it has also been bitten to some extent by the global and financial malaise which is worsening by the week and month.
It now appears that the much taunted austerity measures are unlikely to work in Europe. In fact, Europe is slipping fast into desperation and socio-political despondency as manifest by large demonstrations, riots, looting and burning over a large section of Europe which occur from time to time. Thus global economic and financial rehabilitation appears, destined to materialise only at a distant future.