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Cotton prices on the domestic market remained stable on Thursday but turnover was said to be moderate with only about 225,000 bales (155 Kgs) of unsold cotton remaining unsold from the current crop (August 2016/July 2017). Even though the international prices of lint are mostly firm, local cotton business is said to be slow.

Thus lint prices have remained mostly ranged bound in the domestic market. In both Sindh and Punjab, lint prices were generally said to have ranged from Rs 6500 to Rs 7000 per maund (37.32 Kgs), depending on the quality. Mills are only lifting cotton sparingly, according to their immediate needs. The larger mills with required liquidity have even imported cotton in desired numbers earlier in the season.

Now new crop (August 2017/July 2018) sowing is taking place steadily in Sindh which started a few weeks ago. Now cotton sowing has also started in the Punjab which should increase steadily according to conducive weather.

The textile industry in Pakistan remains in a very serious situation and its condition continues to get worse. Cotton and textile traders and industrialists including the ginners conveyed their serious concerns last Wednesday to the members of the National Assembly Standing Committee on finance which was presided over by Qaiser Ahmed Sheikh where proposals for the forthcoming federal budget were discussed. Amongst the major difficulties discussed were high cost of energy, non-treatment of package materials under zero-rated regime, pending of large sum of refunds payable by the government to the textile industry which are being withheld since a long time and excessive borrowing by the government from the banks leaving little funds with the banks for paying to the cotton and textile industry.

Thus the cotton economy in Pakistan is said to be suffering since a very long time. The textile industry also needs restructuring of loans and also foreign exchange components which would enable it to earn one billion dollars for the country and will also create employment for nearly five million workers. This restructuring of loans should be done for a period of eight to ten years.

The meeting was also informed that exports of Bangladesh had shot up from 24 to 34 million dollars where as exports in Pakistan have fallen by five billion dollars during the last four years with no improvement visible.

In another news, the Karachi Cotton Association (KCA) is said to have expressed its serious concern on the reports that the government is considering to levy duties and taxes on import of raw cotton. Due to shortage of local crop over the past two seasons (2015/2016 and 2016/2017), the domestic textile mills have been compelled to import raw cotton from abroad to meet their requirements of cotton.

On the global economic and financial front, all eyes since the American presidential election (November 2016) have been primarily focused on the new White House occupant, viz. Donald Trump. And rightly so. Since the announcement of his candidacy and the unfolding of his economic programme, nothing substantial was generally seen expect an approaching economic gloom leading to doom.

However, since then two things have emerged on the economic scene. First, the equity and commodity markets have mostly seen an unexpected but definite rise around many parts of the world, and secondly president Trump has not been so foolhardy not show any flexibility in pursuing his economic programme as per his campaign promises even when he saw scope or the necessity to modify it in his national or even the global interest.

To begin with, the global markets saw good scope in American economic growth if the taxes were decreased materially which consequently would spur the global economy. Then Donald Trump also expressed flexibility on other issues like the future of NAFTA (North American Free Trade Agreement). Moreover, besides promises to cut taxes, rationalize regulatory provisions and build up the large infrastructure of America through vast public spending, pushed up optimism in no uncertain terms. These steps sent strong signals to the American populace that put life into the nearly decade old American economy which was hitherto dithering directionless.

This strategy became instrumental in giving rise to a number of economic gauges which instilled consumer confidence leading to spreading of consumer confidence amongst fellow Republicans and also the public at large.

Though American and other leading economies around the world have been performing relatively better than over the previous several years, there are still some very sensitive points around the world, both economically and politically, which can upset the improving global economy. These include the shattered Middle East, tension in the Korean peninsula, the elections next week in France, besides the threatening posture of North Korea which is pursuing a threatening nuclear programme coupled with a dangerous ballistic capability.

Whatever its merits, the International Monetary Fund (IMF) has warned the Trump administration that excessive deregulation of the economy could "increase the likelihood of another (economic) meldown". In France the global financial agencies see a victory of Marine Le Pen as being too much on the right side of the political spectrum encouraging pollsters to believe that Emmanuel Macron will be the next French president and with Brexit and Frexit around the corner, the fate of global politics as well as its economy remain very vulnerable.



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