The spot rate on Tuesday was at Rs 2350 without upcountry rate.
WORLD SCENARIO:
The cotton futures moved both ways on the NYCE hit by mainly speculative sales and speculative and fund buying while major players watched the impact of huge US cotton harvest, besides hectic efforts among the WTO are on to save Hong Kong talks in December on farm and prospect of a flop.
The December future opened at 51.87 and March 54.49 while it closed on Tuesday higher at 52.11 and 54.78 cents a pound respectively.
On the first day's session futures ended easier on speculative sales as the market slumped when it failed at its highs and fiber contracts could slip further due to follow through says in coming days. Fundamentally, most investors are monitoring the harvest of the huge US cotton crop and whether demand will be sufficient to absorb the large amount of supplies of cotton. Trade is also keenly looking how talks are progressing to save HK meeting of the WTO from a Doha type collapse.
On Wednesday late speculative buying caused futures to close firmer and fiber contracts may well stay in a band given the dearth of fresh leads at the moment. Futures lost ground from the opening bell from steady sales by speculators but rebounded late to finish within a few points of its session' s peak. The December ended at 52.29 and at 54.76 cents a pound.
LOCAL TRADING:
The surge in prices started in the previous week sustained owing to decline in phutti arrivals due to transportation problem before long Eid holidays. Spot rate was twice raised, Rs 25 each time to take it at Rs 2350. The asking prices were naturally also higher by Rs 50 to Rs 75. The major players eagerly looking for the third PCGA fortnightly statement that was expected to provide trading direction, they hoped.
On the very first day as expected if market began firmly as spot rate was raised by Rs 25 to Rs 2325, though trading was sluggish before Eid holidays. Phutti prices in Sindh were seen at Rs 1025-1075 and in Punjab retained the previous level at Rs 1050/1100. According to market operators traders were busy celebrating Divali and Muslims were busy preparing to celebrate Eid on November 4, 2005.
On Tuesday trading pattern was same as another rise in spot rate was marked despite sluggish trading before long holidays. The phutti prices generally were unchanged while rate in ready was in Sindh Rs 2200/2300 and in Punjab prices ranged between Rs 2375/2400.
On Wednesday holiday mood rather than business mood was evident as most buyers took to sideline as the coming three days were to pass in Eid celebrations. In Sindh and in ready cotton was selling between Rs 2250 and Rs 2400, and Punjab prices ruled between Rs 2375/2400 .
PRICES SHOULD FLUCTUATE, BUT:
The PCGA's two consecutive well surveyed figures revealed sharply lower trend in production despite signal from reports in newspapers all was well on the cotton front. Reports would tell interested quarters that a careful watch on the cotton plant growth or production won't do any damage.
The cotton prices were obviously low as phutti ruled around support price at Rs 975/1000. Spinners and textile millers taking reports on face value had a feeling that things were going their way. They were lifting, but cautiously to keep prices in their control.
A surprise emergence of cotton exporters tend to push cotton demand and prices higher. But the ginner were feeling the prices had stayed too long to the credit of consumers due to the TCP and reports. The ginners however found the close observers to cotton trading, fault during survey where sharp shortfall was noted and was confirmed so when second fortnightly report was announced. the shortfall of 500,000 and then another shortfall of similar number affected cotton price and spinners waiting for sometime guessing what and how had happens.
Spot rate was low then at Rs 2125. Phutti as a push showed a rise and in Sindh it was Rs 890/925 and in Punjab at Rs 990/1010 per 40 kg. In ready cotton ranged around Rs 2175 and Rs 2200 and above. Still prices were much lower than the first sale in early July had it at Rs 2500.
The psychology was in guessing shortfall to better the size of the ruling rates. In the second week of October asking prices went up by over Rs 50 to Rs 2275 and Rs 2300. The prices did not relent and subsequently rose to Rs 2425 and Rs 2450. The spinners who are allergic to any price for jerk did not stop but continued buying but not the ginners way they would have wanted. Ginners pulled prices down telling they were selling lower grade lint. Soon or in hours ginners rose Rs 25 twice to stretch the size of spot rate to Rs 2350. Ready prices too got some support to go up to Rs 2375/2400. The markets are no doubt unpredictable, circles said but did not absorb as they said conditions were not transparent.
PRIVILEGED CLASS?
Even though Hong Kong WTO conference ends in a situation normally would be termed as die-hard failure, the sympathy for rich may help the December 13-18 meeting end Doha way with oxygenated throbs though. At last, with comments from all sides, the chiefs of the IMF and WB have ventured to speak in the language of poor first later for the privileged ones.
They have apparently the poor to lose more if a deal in HK falls though with subsidies, high tariffs or without them. They have been harbouring soft feelings for those countries they are not tired of donating money to breathe with difficulty though.
They want to address those countries touching the threshold of to be called soon rich countries like India, China and Brazil to take the brunt and salvage the HK Round or the privileged rich, knowledgeable sources commented on hopeless Hong Kong deal in some eight weeks hence. The WTO has taken over 40 years to come to this stage. Unfortunately there are a couple of similar issues which has lingered on for 50 years because minor issues are preferred by privileged few keeping key issues in cold storage.
Any such suggestion is hypocritical and not 21st century like, they said. The youth who will take up tomorrow in their hand, must not be left lurch to take up WTO system altogether afresh. Men have reached today the moon, walk when they wish so to say in the skies and fathom the bottom of the foaming and roaring sees.
They quoted noted American big cotton magnate who under similar disappointing situation had questioned are subsidies good and himself answered as no. Are they (subsidies necessary), said "yes". Is there free trade in the world. He said absolutely "Not", Guess readers and share your findings with others. And when January 2001 was advancing closure and the world was expecting all is well. An American cotton exporter was quoted as saying "subsidies are to stay, whether WTO stays or goes." Beyond that pen refuses to write anything!
TRAINING PROSPECT:
The World Trading Organisation (WTO) has perhaps opened up, or is expected so, billion dollars gains for the enterprising exporters, but for Pak exporters, particularly textile exporters meant hurriedly arranged money to update the value-added sector.
This sector alive to the facts was always hammering the authorities for production of value added products like apparel and garments, which they said could earn ten times more then cotton and cotton yarn. In fact they used to argue exports of cotton, cotton yarn and grey cloth edged away the competitive edge from few industries insisting on value addition. But authorities paid no attention to their clamour.
Late Doctor Mahbubul Haq had big flight to get value-added sector a rightful place, lost his own place and honour. But Dr Haq kindled a light of wisdom and today Pakistan is buzzing with ideas of creating a culture of contamination free cotton and training to textile workers. The big magnates of a prestigious organisation that used to be, don't now rub shoulders with the high ups in Islamabad.
Thank God doctor's initial efforts are bringing forth today fruition. And still to mature WTO system has also been instrumental in awakening. Not that it is first of its type and size that training is being planned for workers engaged in producing textile products. Now government can expect export large to move quickly from just $8 billion or so to any respectable high.
Close to cotton and textile observers commenting on international organisations coming here to provide training to garment industry, the industry which had little recognition from successive governments has earned recognition, they said. However, what looked a little strange to seemingly leave out workers in profit. Primarily they have stressed to have been asked to pay for receiving the training.
How much do workers get to spare to meet the training cost. If the garment industries change the outlook of the foreign exchange earning, only regrets will remain about the past neglect to it. The pleasure is also that now textile ministry is gradually moving to create its name and place held up for the last half a century to promote under servicing sectors. Once again textile town and cities are off the newspapers whether any progress is making or have been held hostage to serve interests?
TAIL PIECE: A follow up story narrates current date and comprehensible idea what the American and European Union are coming for. Now it is quite clear the US, EU buyers team will land in Karachi on November 12. During the stay the will make most of the three-day stay and of meetings with what it was said short listed exporters. The aim of the visit was made clearer by saying that they will explore the possibilities of the purchase of only woven and knitted garments.
The team will proceed for Lahore same day November 15 and purpose being the same. What is not clear whether they have option of discarding altogether or will book orders or even ask for shipments right away.
Whatever may be the reason for foreigners visit Pakistanis too must make most of the contact through their unmatched products and ultra-salesmanship. A line or two to remind Pak exporters that they should now be ready to proceed to Tokyo, Japan. Similar shows arranged at the Expo Karachi had secured good business.