Cotton market witnesses slowdown on budget eve

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There was mostly a lull on the cotton market as traders awaited the scheduled announcement of the federal budget (2016/2017) on Friday. Thus the pace of business in the ready market was slow on Thursday while only a few lots of cotton changed hands. Not much buying was thus reported. Brokers said in Karachi that Sindh styles were being offered between Rs 4,800 to Rs 5,700 per maund (37.32 Kgs), according to the quality. In the Punjab, lint prices were reported to have ranged from Rs 5,300 to Rs 5,800 per maund on Thursday. Traders added from Karachi that not much buying took place in the ready market and the tone of the market was on the easy side. According to the Federal Committee on Cotton, the targets for the 2016/2017 cotton season have been set at 9.500 million bales (170 Kgs) for Punjab, 4.50 million bales for Sindh, 0.003 million bales for Khyber Pakhtunkhwa and 0.098 million bales for Balochistan, or a total of 14.101 million bales for Pakistan. It is generally believed that a large portion of area in Sindh has been planted with cotton but sowing in Punjab will continue for the next several weeks.

The All Pakistan Textile Mills Association (APTMA) has welcomed the government’s decision to reintroduce Zero Rating or No-Tax no-Refund Regime, for textile sector which is the largest export sector in Pakistan for its exports. APTMA Chairman Tariq Saud thanked Prime Minister Nawaz Sharif, Haroon Akhtar Khan, special assistant to the prime minister, Finance Minister Ishaq Dar and FBR Chairman Nisar Muhammad Khan. In another instance, the acting Chairman of APTMA (Punjab) Syed Ali Ahsan has urged the government to maintain the exemption from electricity load shedding to the textile industry prime consumers of electricity on independent feeders during the Holy Month of Ramadan. Ahsan contended that closures of power supply half an hour before Aftar and ending half an hour after Sehr, would force the industry to close down one shift and lay off tens of thousands of workers in Punjab. Reports added from Karachi that five trucks loaded with new crop (2016/2017) seedcotton (Kapas/Phutti) from Sakrand, Badin and Digri were dispatched at Rs 3000 to Rs 3200 per 40 Kgs to Punjab (3 Trucks) and Sindh (Shahdadpur) 2 trucks. Cottonseed (Kapas/Binola from new crop was selling at Rs 1600 / Rs 1800 per maund. In ready sales of lint cotton from Punjab, 250 bales from Muhammadpur Dewan sold at Rs 5400 per maund (37.32 Kgs), 400 bales from Alipur sold at Rs 5500 per maund, while 200 bales from Alipur also sold at Rs 5600 per maund.

On the global economic and financial front, a stark and scary warning has none from none other than the Chief economist of the Organisation for Economic Cooperation and Development (OECD), Catherine Mann, that the world risks getting caught in low-growth trap, denting the future of generations to come, unless governments step up spending quickly”. In an AFP report from Paris, Catherine warned that slow growth recovery since the global economic crisis of 2008 “has precipitated a self-fulfilling low-growth trap”. According to the OECD appraisal, there is a lack of any coordinated, coherent or comprehensive global approach to the world-wide economic malaise which is likely to prolong the malady and in turn pass on the economic sickness to the future generations.

According to the OECD, relying only on low interest rates provided by the central banks has proved inadequate so that government spending is necessary in such sectors as infrastructure and education. The other major fear pertaining to further damaging global economic growth concerns “Brexit” as Britain gears up going to the polls on the 23rd of June, 2016 to decide whether to leave the European Union. In case “Brexit” materializes not only Great Britain is likely to suffer a sizable setback, the tremors of such a jolt could cross the Atlantic into America and also to other corners of the world. It has been assessed that in case of such an eventuality like the “Brexit”, the British economy is likely to slow down by nearly three percentage points. Reports add that Ireland, Luxembourg and the Netherlands would be the first of Britain’s European partners to bear the brunt in the event of Brexit”. According to a report from Reuters datelined London / Beijing / New York, surveys in different countries showed that “global manufacturing activity remained stuck in a rut last month with factory output from Asia, Europe and the Americas barely improving”. Such a universal economic jam adds to the assumption that the global economy is stuck badly and we could possibly enter into another Great Recession in 2017 / 2018. The Brexit issue and the compounding refugee problem on the Mediterranean Sea and beyond into Continental Europe and the U.K have shaken any confidence that was left for anticipating a quick global economic recovery. According to entrepreneur and Fund manager Jim Mellon, the migration of refugees into Europe is a serious issue and several of them could join terrorist forces like ISIS which would be awful and could disturb the peace and solidarity of Europe.

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