Buying activity rises gradually, prices move in narrow band on cotton market-Texglobe

KARACHI (January 25 2010): Gradual rise was marked in buying activity, as holiday mood melted away owing to season's fag end, the spot rate with an increase of Rs 25 stood at Rs 4600.

WORLD SCENARIO:

The X'mas and New Year holidays gradually out of mind the trading in cotton was marked taking pace. Whatever little buying venture was seen was due to investors and spectators. The brokers who are keeping watch on the trading were openly speaking about pressure, which obviously meant futures should remain in region or even weaker than before holidays started including that of Martin Luther King's on Monday January 18, 2010.

The most commodities stay depressed, while dollar keeping firm affecting cotton futures swinging either side. The investors still have long position taking hope from USDA figures acreage being utilised to grow cotton on comparatively reduced land, while consumption to stay on higher side. At one time, towards the mid week, investors were liquidating position even to collapsing value, since the stock was as high with them as 30,000 lots, which is bound to keep cotton on defensive.

Dollar is also not coming to help, which weather is unhelpful. The last days firmness was correction after continued fall. The futures, which had risen above 75 cents, are now players taking relief it stays around 67 cents. The weekly export sales and shipments were awaited to derive some lost strength.

On Tuesday the NY cotton futures ended easier on investor sales following a holiday break and brokers feel the weak technical picture could further pressure fibre contracts this week. The cotton market was shut on Monday for the Martin Luther King Jr. holiday. The key March cotton contract fell 0.44 cent to close at 71.64 cents per lb, dealing from 71.53 to 72.64 cents. Volume traded in the March contract hit 10,279 lots.

On Wednesday the NY cotton futures closed lower on investor sales inspired by weakness in outside markets, but solid consumer buying limited losses, brokers said.

The key March cotton contract retreated 0.84 cent to finish at 70.80 cents per lb, dealing from 70.52 to 71.73 cents. Volume traded in the March contract hit 13,128 lots. On Thursday the NY cotton futures finished higher on trade and investor buying as the market staged a modest rebound after falling sharply over the past few sessions, brokers said.

The key March cotton contract climbed 1.05 cents to finish at 71.85 cents per lb, dealing from 70.82 to 72.08 cents. Volume traded in the March contract hit 8,196 lots.

On Friday the NY cotton futures closed lower on investor sales although the market stayed in a band and will be looking for leads to provide direction to fiber contracts next week. The key March cotton contract dropped 0.78 cent to finish at 71.07 cents per lb, dealing from 70.98 to 71.95 cents. It was an inside day since the range was within Thursday's 70.82 to 72.08 cents band. Volume traded in the March contract hit 7,973 lots.

LOCAL TRADING:

The week has been interrupted by fog, which has affected trading to a great extent when spot rate hung flat at Rs 4575, only 5000 bales lifted, while phutti ruled in Punjab and Sindh at Rs 2000 to Rs 2300. The cotton changed hands at Rs 4460, and Rs 4700. The fog restrained transportation hence buyers were depending on the past stocks and waiting for sky to get cleared and normal transaction begins. However, prices were boggling some mind, which may go up. The demand gradually is picking up on the market and so the risk of rise in prices.

The market operators, however, were communicating good news that production target of 12 million bales has surpassed. The consumers are in a good mood to buy cotton available locally and export more as authorities are approaching every avenue to allow exports of cotton products without much nagging. On Tuesday the spot rate was unchanged at Rs 4575, phutti was selling in Punjab and Sindh at Rs 2000 and Rs 2300. The enthusiastic cotton buyers lifted about 6000 bales of cotton at prices ranging between Rs 4500 and Rs 4700 depending on quality urgency.

On Wednesday the pent-up buying resulted in lifting of 16,000 bales of cotton in price range of Rs 4415 and Rs 4750, while phutti in Sindh and Punjab ranged between Rs 2050 and Rs 2350 after it was seen rising by Rs 50. The Spot rate was also higher by Rs 25 to Rs 4600. A couple of days buyers' absence naturally prompted then to lift higher quantity. The hope has been gathering that government efforts to explore market access of products will earn scope for more.

On Thursday buying sustained on the market and so the price hike despite marked slippage was seen in New York trading. The spot rate was unchanged at Rs 4600, phutti rates in Sindh and Punjab were in the range of Rs 2050 and Rs 2350, while over 22000 bales of cotton changed hands in price range of Rs 4550 and Rs 4750. The cotton consumers know well that they have to lay hands on quality cotton, as season is at its fag end.

On Friday the Karachi Cotton Association (KCA) official spot rate was unmoved at Rs 4,600. In the ready business, after reduced participation by the genuine buyers, activity was nearly halve as 10,000 bales of cotton changed hands between Rs 4450-4700. Phutti prices in both the Punjab and Sindh were same at Rs 2050-2350.

On Saturday firmness prevailed, as mills and exporters both were active in making the deals at the obtaining price levels. The Karachi Cotton Association (KCA) official spot rate was unmoved at Rs 4,600. In the ready business activity more or less 9,000 bales of cotton changed hands between Rs 4500-4750. Phutti prices in both the Punjab and Sindh were same at Rs 2050-2350.

THREAT TO GO ON STRIKE:

Strike threat or strike is said to be ones right living in so called democracy. But in Pakistan how much it has harmed, and without any worth is littered in the shape of economic vulnerability. As long as the exchequer is invulnerable, the world is unlikely to befriend us-do we have to, go round many places to locate one? Corruption, violence arson and refusing to every thing that is good, has brought country to this passe.

Export of yarn or cotton and even imports of the two named is not a complex issue like settling it with next door neighbours. Spinners and textile made-up exporters are very closely related but all-important self-interest divides them. Should they be so apart to cast a wistful eye on each other for "interest". The country and economy isn't any thing to bring them so close to walk together and hand in hand what awfully it appears similar to some interest beyond the country's borders.

The decades have lapsed Pakistan has been left behind by several countries like India, China, Malaysia and Singapore to name a few. Has time not come with resounding message to at least catch up with them. The most of the above named countries own much of the progress by usefully utilised raw materials such as cotton and listened to "mantra" of our experts who we disdained.

This is spinners right to export cotton yarn as per the prescribed rule but how unwholesome it sounds that Pak cotton yarn takes away edge from Pakistan made-up export for that sake. It is high time Pakistanis shed their ludicrous whimsicality to make this country, which has all the potential that has made the developed world- and Pakistan?

GARMENT CITY MEETING:

When garment city or textile city coming into being is about to slip out of mind, authorities called a meeting to revive the projects immensely in need to keep economy going. The textile sector is highest earning and employing since long but when it comes to augmenting and facilitating some time money bar or some hitch comes in the way. How long back it was when papers reported and since then one or the other issue is raised, as if the problem is exclusively for Pakistanis.

On daily basis corruption cases are coming above board but except one or two in last decades, that too very lately. That has been taken seriously whether the money will be put into the projects and when is the question will remain mind boggling. The textile state being set up at Faisalabad is also, so it appears, is covered to give it a new lease a life.

The cotton growers are very enthusiastic to grow as much is needed. Five-year textile policy is said to have projected cotton need at 15 million bales. But the growers are not responsible if India takes away our water or cotton or yarn is restrained from exports. The cotton exports, however, have never been curtailed despite local cotton was made to be sold at throwaway prices and even burnt by roadside.

If textile city and garment cities are really in the offing, they are welcome, but authorities should have knowledge about cotton production, need of the spinning mills and made up exporters. The growers, spinners and value-adders all are Pakistanis and all are striving for the well being and prosperity of country and economy. Why is it that problem like yarn exports and textile manufactures and exporters have tough complaints?. Can't they sit along and sort out and honestly look into the needs of each other with sympathy and over all interest of the ever in lurch country? There are seemingly some ways are being found to make this country strong, as, there is no doubt, it can be made so.

HEMTEXTIL FAIR ENDS:

The known Hemtextil fair participants from years were not pronounced, though report used such words, as the largest ever from Pakistan were present. The Pak participants in the Hemtextil Frankfurt, which concluded the other day were largest and were ranked at number three in terms of exhibitors. Hemtextil is the largest trade fair of the textile goods in the world, while Pakistan is the maximum forex earner with textile products export.

The fact has communicated favourably in the Europe and world. Nearly 51 exhibitors were from Pakistan out of a total attended was 3300 exhibitors. The number of those Pakistanis who participated at their own was not given. The exhibitors made good business contacts and were optimistic to earn good foreign exchange. It would be better estimated if sales orders were given as was the past practice.

It was heartening to learn from the report that Pak exhibitors of comprised of small and medium sized exporters and strangely enough, they spoke good about the goings and expressed willingness to participate in coming years. It was meaningful senior and noted textile exporters were quite on the success of the fair. Ambassador of Pakistan was happily present in the fair and expressed satisfaction over the proceeds. However, those who are close observers of the diplomats expressed that diplomats can do a lot to improve the exports from Pakistan. The Trade Development Authority of Pakistan (TDAP) supported the participants, the 51 exhibitors while the rest participated directly. The stress on TDAP support for 51 exhibitors was not understandable.

MEETING WITH SWISS BUSINESS COUNCIL:

Stepped up efforts to seize opportunity at ones door, whether, be it that of investment or exports are praise worthy. To day hectic drive being made by relevant officers in whatever place they are bespeak Pakistan is at the thresh hold of change for the better. The TDAP chief's meeting with members of the Swiss Business Council (SBC), attended also by other potential leaders from French and German Business Councils, in fact that entire EU.

Naturally the meeting focused mainly on ways and means to enhance exports particularly of textile products, blocked to a great extent on various counts, such as anti dumping duty and refusal to GSP plus to this country, while no such barriers put on rivals China and India. The exports of leather products, gems jewellery, sports goods, surgical instruments and light engineering goods also received attention.

Besides this, investment in export oriented industries of this country was discussed. The importance and utility of the discussion cannot be over emphasised. The report earlier had mentioned presence of Pak ambassador attending the Pak pavilions and later entertaining to the exhibitors participants from this country speak well - the discussion should have concentrated how diplomats can help enhance exports and investments. What, however, was apprehensible why Hemtextil fair was attended some, particularly the senior ones participated the fair at their own.