At best, activity on the cotton market was moderate where mostly easy and subdued tendency was apparent, even though a few exporters also participated. The induction of the Trading Corporation of Pakistan (TCP) to buy cotton and stabilise the prices has yet to show any remarkable progress in lifting the lint prices for the benefit of the growers.
Thus brokers in Karachi described the condition of the ready cotton market to be mostly easy and subdued. Even yarn prices were generally obtaining in negative territory. Even global lint and yarn prices were said to be on the weak side. A high level meeting was said to have been held in Lahore in which top class government officials headed by Punjab Governor Chaudhary Mohammad Sarwar and the private stakeholders participated to solve the long pending cotton conundrum obtaining since the beginning of this season (2014/2015).
In this connection, the federal minister for commerce Khurram Dastgir Khan told the members of the National Assembly last Wednesday that the government would purchase one million bales of cotton and in this regard the Trading Corporation of Pakistan (TCP) has signed contracts with the ginners in both Sindh and Punjab. The minister assured the member of the National Assembly that necessary funds in this regard had been released last Tuesday. He added that government would intervene in the market to ensure the interest of the growers when necessary.
On Thursday the seedcotton (Kapas/Phutti) prices in Sindh reportedly ranged from Rs 1600 to Rs 2450 per 40 Kgs, and in the Punjab they prevailed from Rs 1800 to Rs 2650 per 40 Kgs, according to the quality. The price of higher quality of seedcotton increased by Rs 25 to Rs 50 per 40 Kgs to enable the ginners to produce better quality of raw cotton in order to meet the requirements of the TCP. However, till now the entry of TCP into the market has still not increased the cotton prices remarkably.
Generally sparking, the prices of lint cotton ranged from Rs 3400 to Rs 4900 per maund (37.32 Kgs) in Sindh, while in the Punjab the cotton prices reportedly ranged from Rs 4800 to Rs 5100 per maund according to the quality. In ready cotton sales in Sindh, 400 bales from Sarari reportedly sold at Rs 4500 per maund while 600 bales from Upper Sindh sold at Rs 4850-Rs 4900 per maund. In the Punjab, 1000 bales from Bahawalpur sold at Rs 4800 per maund, 1000 bales from Harunabad sold at Rs 4900 per maund. 600 bales from Dera Ghazi Khan and 1000 bales each from Layyah and Rahimyar Khan sold at Rs 5000 per maund, 1000 bales from Khanpur sold at Rs 5025 per maund, while 1000 bales from Rajanpur sold at Rs 5050 per maund.
Till now the current crop (August 2014 – July 2015) condition in Pakistan is reported to be satisfactory. It is also generally believed that most of the current cotton crop in Pakistan may be harvested sooner than the normal time. Six licensed cotton brokers of the Karachi Cotton Association (KCA) belonging to the Naseem Usman panel have been elected unopposed. Muhammad Naseem Usman is the Chairmain, Muhammad Taufique Haroon is the Vice Chairman, Abdul Jaleel Khan secretary, Faraz Muhammad Yousuf, Joint Secretary, Tariq Abbas as Treasurer and Girdharilal Assundomal as incharge public relation.
On the global economic and financial front, none other than the Organisation of Economic Co-operation and Development (OECD) warned in no uncertain terms that the weak Eurozone economy is a major threat to global growth calling for more flexibility in fiscal rules for struggling European Union members like France and Italy. There are fears that compelling France and Italy to adhere to stricter fiscal measures is likely to throw the Euro area back into another recession.
Both France and Italy, besides the peripheral defaulters like Greece and Spain, have failed to reduce their bulging national debts which remain way above the ceilings prescribed by the European Union. Bickering between Germany on the one hand and France and Italy on the other regarding the massive debts built up by the latter two countries has reportedly reached serious proportions.
Chief economist of the OECD Catherine Mann has been reported by AFP to have said that “neither France nor Germany have done much in terms of structural reforms”. Mann added that “the Euro area is grinding to a standstill and poses a major risk to world growth, as unemployment remains high and inflation persistently far from target.’
The Organisation of Economic Co-operation and Development (OECD) further projected that “growth is set to be stronger in the United States and the United Kingdom than in the Euro area and Japan”. The OECD carried on the say that among the emerging economies “growth with edge down in China, remain weak in Russia and Brazil, but will recover steadily in India, Indonesia and South Africa”. The upshot of this OECD assessment of growth in the global economy is precarious with the Eurozone economic stagnation remaining a key hurdle to any near future improvement of the global economy.
Besides the current recession into which Japan has fallen lately and the anemic growth in the Eurozone, Chinese economy is also slowing down as a consequence. It came somewhat as a surprise when the Chinese monetary authority cut interest rates last Friday for the first time in more than two years according to reports from Beijing.
The other worry on the global economic front was the glut of carbon and crude oil supplies which triggered a fall in oil prices to four year low levels. While this may be a boon to several countries which do not produce oil and has brought benefits to a large number of emerging consumers, it has brought large losses to countries in the Middle East, Russia, Venezuela, Mexico and Iran. Organisation of Oil Exporting Countries (Opec) called an urgent meeting on Thursday to avoid a possible serious setback to the oil producing countries. We may presently conclude that serious economic problems are still stalling the global economy and its revival still does not appear on the horizon.