Easy tone pervades cotton market


Despite higher prices for cotton prevailing in China and India and positive increase was also reported on the New York cotton futures market, lint prices on the ready market in Pakistan have slipped and business was also said to be materialising on a modest scale. Mills were hardly eager buyers on Thursday so cotton turnover was reported to be low. Now there are said to be only about 100,000 bales (155 Kgs) left unsold in the market from the current crop (August 2015 / July 2016). From this meager stock, there are very small quantities of good quality cotton. The Trading Corporation of Pakistan (TCP) which had earlier said to have bought 96,000 bales (2014/2015) now has about 69,000 bales of unsold cotton. Practically speaking, the current cotton season in Pakistan is reaching its end shortly. The cotton output in the current crop (2015 / 2016) has been calamitous as nearly one third of the output has been wiped out. Pakistan harvested only about 9.8 million bales (155 Kgs) instead of the projected 14.8 million bales. Defective seeds, spurious fertilisers and inclement weather are said to have damaged a large part of the cotton crop in Pakistan during the current season. Thus the cotton economy at large has suffered in Pakistan in a big way so that the growers, the ginners and also the textile millers have made big losses. Despite repeated pleadings by the growers, ginners as well as the spinners, government is said to have taken no definite steps to improve cotton sowing, reducing cost of doing business for the textile industry or refunding large sums of money payable to the textile industry and the exporters. Generally speaking, the price of current crop cotton from Sindh ranged from Rs 4800 to Rs 5800 per maund (37.32 Kgs), according to the quality. Cotton from Punjab was being offered from Rs 5300 to Rs 5900 per maund on Thursday in a quiet market. Seedcotton (Kapas/Phutti) from the new crop (August 2016 / July 2017) may start arriving into to ginning factories of Sindh by the middle of June, 2016. Seedcotton from Punjab may be delayed and arrive later on. In ready cotton sale reported till Thursday evening, 400 bales from Yazman Mandi in Punjab reportedly sold at Rs 5425 per maund. Buying interest by the mills was reported to be muted. On the global economic and financial front, the name of the game remains volatility leading to a surge in global uncertainty regarding any economic activity. The world at large is plagued with numerous problems including a divided Europe, a very weak China with its deteriorating economy, refugee problem in the Middle East, North Africa, Europe and Asia and the ever-expanding problem of global terrorism. While the Russian economy is slumping, several loan defaults are being reported by Gulf banks due to oil slump. Europeans are becoming increasingly skeptical and fearful of the migrants. All attempts to control the refugee influx into Europe have failed. The European Union has described attempts to control various smuggling operations into Europe as a failure. An estimated eight thousand refugees arriving from Libya have died in an attempt to immigrate, where as more are being reported during attempts to migrate. According to Angelina Jolie Pitt, the United Nations Special Envoy on Refugees, there is a severe crisis in the immigration attempts from Libya which is indeed deplorable. Such a situation is creating multifarious problems of large magnitude. She feared that the European refugees problem could lead to an uprising. According to some observers, there are clear chances of chaos and anarchy rising in Europe. The serious and globally ingrained socio economic problems promise to escalate sooner rather than later and disturb global peace and economic activity on a large scale. Conflicts of interest between various countries are increasing. Old models of banking and business are weakening, while corporate culture also needs a change to improve its credibility and integrity. In the United States the unemployment figure has hit a fourteen month high level. Observers say that the real unemployment figure is much higher. Japan is continuing to face low growth since 25 years even with negative interest rates. Japanese exports fell in April, 2016 due to a strong yen. According to latest reports from London, despite earlier growth reported in the Eurozone business at the beginning of the year, Market’s flash Composite Purchasing Manager’s Index now has slipped down to a 16-month low level. It is thus concluded that the global economy remains in the doldrums and may not revive any time in the near future.