After an easy condition on the cotton market at the beginning of this week, prices became steadier on Thursday due to mill demand and also some covering by the exporters. Scattered rains in several parts of Sindh in such stations as Mirpurkhas, Tando Adam, Kunri and Sanghar and cloudy weather in Punjab have imparted a modicum of steadiness to lint prices.
Higher values on the cotton futures market (ICE) in New York have also influenced cotton rates to become relatively stable for the time being. Seedcotton (Kapas/Phutti) prices in Sindh reportedly ranged from Rs 2475 to Rs 2500 per 40 KGs according to the quality on Thursday, while in the Punjab they are said to have ranged from Rs 2300 to Rs 2500 per 40 Kgs. Despite the commencement of some monsoon rains and a moderate rise in levels of the rivers, estimated output for the current season (August 2012-July 2013) remains essentially unchanged.
Lint prices in Sindh reportedly ranged from Rs 5,750 to Rs 5,800 per maund (37.32 Kgs) while in the Punjab they are said to have ranged from Rs 5,650 to Rs 5700 per maund. For the time being, cotton rates along these lines are routine but the input of monsoon rains till at least the middle of September, 2012 remains crucial on the health of the cotton crop. The behaviour of the monsoon rains remains crucial to the growth and development of the crop.
Generally speaking, trade still believes that an output between 14 to 15 million domestic size bales on an ex-gin basis should be counted for the current season as gauged by the present crop conditions. From this anticipated output domestic mills may consume anywhere from 14 to 14.5 million bales, while the exporters may ship in the range of half a million to one million bales. Mills are expected to import one to one and a half million bales during the ongoing season (August 2012-July 2013).
Till now the cotton projections remain normal and textile mills are working more or less routinely. However, gas supply and power problems still continue to create problems which have now become chronic. About 3,000 bales of Sindh cotton were reportedly sold on Thursday from such stations as Tando Adam, Shahdadpur, Mirpurkhas and Sanghar in the reported range of Rs 5,775 to Rs 5,800 per maund in a steady market. Recent rains and sporadic sprinkles are said to have been beneficial to the cotton crop.
Besides some of the spinning mills, even cotton waste units have resumed output which had closed down earlier. So the ball is more or less rolling for the time being in both the raw cotton and textile sectors. President Asif Ali Zardari attended a dinner recently held by All Pakistan Textie Mills Association (APTMA) at the presidency. The President assured APTMA Chairman Mohsin Aziz of all the necessary help from the government. President Zardari envisions a rise in textile exports to dollars 100 billion in the foreseeable future against the industry target of Dollars 20 billion for the present period.
On the global economic and financial front, the condition of most of the big and small economies continued to cause serious worry. However, hopes of quantitative easing and related measures to assist the various economies continued to give a modicum of assurance to sundry businessmen and investors that mostly government controlled banks in Europe and the United States will come to their rescue. Particularly in the United States where incumbent Barrack Obama is pitted against Republican Mitt Romney in the forthcoming presidential elections due in November, 2012, hopes are high amidst the electorate that government will do more to counter the appalling recessionary tendency which continues unabated.
Thus the global equity and other markets are basically in a state of animated suspension due to the expectations that the Federal Reserve in the United States will provide some meaningful assistance to the economy even if it does not go the whole hog with the Third Quantitative Easing (QE3). Similarly, steps are also being anticipated from the European Central Bank to keep the Continental economies afloat.
Presently, all focus is on the anticipated speech of Federal Reserve Chairman Ben Bernanke who is scheduled to address a conference of central bankers in Jackson Hole in Wyoming in the USA on Friday. US stocks were flat on last Tuesday with little change on Wednesday as investor interest awaited Bernanke’s pronouncements at Jackson Hole. In the United Kingdom, the shares of the miner’s industry pushed down the FTSE index because of fears and worries of the global growth.
From the Far East, Hong Kong shares also slipped while the equity values in Shanghai were said to have hit a three and a half year low. Share prices in Thailand and Indonesia also followed suit. The European shares also slid similarly awaiting the guidance of the central bankers assembled at Jackson Hole.
In the mean time, a news item released recently states that the United States economy grew slightly faster than first estimated in the second quarter but remained sluggish, a government update showed on Wednesday (29 August, 2012). As hope is said to spring eternal in the human breast, the news item has provided some solace to the optimists who are hungering for a positive break in the global economy after having suffered miserably over the past five years.
In any case, any growth in the US economy was only “slightly faster” during the second quarter of this year. Moreover, the over all economy remains “sluggish”. It may be noted that the Commerce Department in America was quick to add that the US economy “continues to tick along at a moderate pace and struggles to break out into a full-on recovery”. It is not known if this news release is inspired or calculative in an election year in the United States.
Be that as it may, the disenchantment of a profusely large number of people around the world with their diminishing and deteriorating socio-economic condition, remains alarming. Whatever the quantitative easing provisions offered to the financial institutions in the United States, it has been reported that most of the small businesses and some of even medium stature are still facing hard times in accessing the desired funding.
Fresh reports are indicating that the Chinese economy, the second largest in the world, is slowing much more sharply than was anticipated. Reports from Shanghai added that China’s manufacturing sector contracted at its sharpest pace in nine months in August. India’s economy continues to sink while its corruption scandals magnify. The basic trouble spots in the peripheral areas of the eurozone are slumping further while France, and now Germany, are feeling the effect of contagion of the economic malaise arising from the sick periphery of southern Europe. The world is out of joint; the centre cannot hold.