Cotton market was fully steady on Thursday due to generally higher advises from the USA as well as India. Domestic buying by both the mills and the exporters kept cotton prices on the higher side. Better yarn prices and steady performance of the mills also kept lint prices in a stable condition. A reputed international merchant was also said to be picking up cotton both in Multan and Karachi and is stocking the same.
Seedcotton (Kapas/Phutti) prices in Sindh were said to have ranged from Rs 1800 to Rs 2350 per 40 Kgs in a stable market, while in the Punjab they are said to have extended from Rs 2000 to Rs 2600 per 40 Kgs, according to the quality. Lint prices were also said to be tightening due to dwindling domestic supplies. Thus in Sindh the general price range of cotton reportedly extended from Rs 4000 to Rs 5100 per maund (37.32 Kgs), according to the quality. In the Punjab, cotton prices were said to have ranged from Rs 4800 to Rs 5200 per maund. Yarn prices were also said to be improving due to increasing lint prices and some enquiry for yarns was also reported.
In ready cotton sales on Thursday, 1000 bales from Khipro in Sindh were reportedly sold at Rs 4675 / Rs 4700 per maund (37.32 Kgs), while 1000 bales of cotton from Sanghar are said to have been sold at Rs 4700 per maund. In the Punjab, 400 bales from Fakirwali were said to have been sold at Rs 4825 per maund, 400 bales from Harunabad sold at Rs 4750 / Rs 4850 per maund, while 200 bales each from Multan and Dunyapur both sold at Rs 4900 per maund.
Brokers added from Karachi that business volume was moderate as the current season (August 2014 / July 2015) is tapering off. Also, there were fewer buyers of lower grade lint in the market. Some lower grade of cotton from Sindh was said to have been sold at Rs 3800 per maund which was reportedly picked up by a mill in Hyderabad.
On the global economic and financial front, the main current news pertained to the fate of Greece regarding its pending loans repayable to the Eurozone as it faced an impending default. The European bigwigs, after protracted talks with Greece, granted it an urgent four months extension for its massive debt bailout providing it a necessary immediate relief to mend its messy finances. The 19 Eurozone finance ministers are reported to have extracted many undertakings from Greece including an assurance that it will provide a detailed programme spelling out how it will rearrange and reform its finances which necessarily will impose hardship on its populace.
Such a step is necessarily an unpalatable back down by the populist Greek Prime Minister Alexis Tsipras while it also remains doubtful if Greece can thrust such hard financial and fiscal terms on its already dilapidated economy.
No sooner the deal extending Greece’s repayments was announced, equity markets around the world reacted positively pushing up several indices to record heights. Earlier, there was acrimony and anger against the Germans whom the Greeks believed were hindering a deal to give it the necessary breathing space to repair and regulate it finances.
Thus for the time being the exit of Greece from the Eurozone has been postponed in turn giving some relief to Europe at large. Most markets were quite jittery about the possibility of Greece exiting the Eurozone which could have disintegrated the zone and further undermined the Continental economy.
Earlier, President Barack Obama had been blaming Europe for the lack of global economic recovery. The US deputy national security adviser Caroline Atkinson had criticised the Eurozone authorities that harsh terms imposed on the weaker deficit countries in the Zone by the richer members was counter productive.
In other news sharp fall has been reported in business investment in the United Kingdom for the second quarter in a row, recording the biggest fall since 2009, according to BBC news. “Spending by business fell by 1.4 percent in the fourth quarter from the previous three months period.” Oil companies have pulled back from investment around the world and also in the UK after oil prices fell by more than 50 percent since June 2014.
On last Wednesday, European stocks were lower on mixed corporate results which halted the earlier rally. Stocks in China were also lower following the lunar New Year holiday. Hong Kong shares were flat erasing the earlier gains, while Tokyo shares snapped their winning streak.