Traders said in Karachi on Thursday that domestic seedcotton (Kapas/Phutti) prices have risen by Rs 100 to Rs 150 per 40 Kgs since the beginning of this week, while lint prices have gone up by Rs 100 to Rs 150 per maund (37.32 Kgs) this week in a firm market.
The seedcotton prices in Sindh are said to have ranged from Rs 2,800 to Rs 3350 per 40 Kgs, while the seedcotton prices in the Punjab reportedly ranged from Rs 2800 to Rs 3550 per 40 Kgs, according to the quality.
Traders said on Thursday that current season's (August 2016/July 2017) output could range from 10.5 to eleven million bales (155 Kgs) of cotton while the domestic mills consumption could range from 14 to 14.5 million bales. Pakistani mills are expected to import between 2.5 to three million bales, while exporters are likely to ship about 150,000 bales.
Some improvement has been reported in the price of domestic yarns due to cotton shortages and higher prices for imported cotton, but still the textile sector in Pakistan is not doing well. Several textile industrialists are reported to be going to Frankfurt to attend the Heimtextil fair which is scheduled to be held from the tenth to the 13th of this month in Germany. Pakistani mills attend this fair regularly to sell their textile products.
In ready cotton sales reported on Thursday, 400 bales of cotton from Mianwali in Punjab are said to have been sold at Rs 6100 per maund (37.32 Kgs), 600 bales from Pir Mahal sold at Rs 6300 per maund, 400 bales from Bahawalpur sold at Rs 6425 per maund, 1000 bales from Rahimyar Khan sold at Rs 6550 per maund, while 1600 bales from Khanpur sold at Rs 6650 / Rs 6675 per maund in a firm market.
On the global economic and financial front, several reports in different parts of the world are showing an increase in inflation and a rise in consumer confidence which could signify the beginning of global economic growth, however modest at this juncture. According to a Reuter's report from Toronto in Canada, "The Canadian dollar strengthened to a near three-week high level against its US counterpart on Wednesday together with gains for other commodity - linked currencies after upbeat global economic data".
The report informs that in several countries in Europe and also in France the consumer confidence has achieved a rise to a nine year high level. Reuter adds that business activity in the eurozone has risen significantly at the fast pace not seen over the past five years. The report adds that business activity has risen remarkably in other countries like America, Great Britain, Japan and China.
In China itself, a flurry for futures buying of commodities erupted with the presumption that government may reduce industrial capacity resulting in shortages of raw material. Besides the binge of buying so clearly apparent in the commodity futures buying in China, the price of gasoline at the petrol pumps in America and Europe has risen after lurking for many years at low levels.
Economists are wondering whether rise in the price of key commodities will stabalise at higher levels and stabalise the global economy or slither back to lower levels again. The present buoyancy in commodity prices is presently pushing up the economic growth in many parts of the world but it remains a moot question whether this rise will remain stable over the long term period. However, some observers still doubt if Donald Trump's ascent to the American presidency will disturb the economic growth recently achieved in several key parts of the world.
There are others who believe that Trumponomics would push up the wages and investment in America widely. However, the Federal Reserve in America and the European Central Bank appear prepared to raise the interest rates should the inflationary pressures rise too rapidly. Therefore, with the recent rise in inflation in many parts of the world it remains a possibility that rate hikes may become necessary to curtail inflation.
The other major problem which had hitherto been pestering the global economy was that of Brexit. While some observers have projected that it could take up to ten years before Britain exits the European Union. However, according to one assessment, Britain's exit from the European Union could conceivably be finalised within two or three years.
In view of the above, we are at a critical juncture which may see the revival of the global economy in the foreseeable future, or else lapse again into multiple political and economy difficulties.
Copyright Business Recorder, 2017