Despite only about 100,000 bales being left unsold from the current crop (August 2015/July 2016) and new crop (2016/2017) trickling in small numbers, the general appearance in the ready market was that of limited activity. There were few buyers for the outgoing crop, but occasional enquiries for the new crop (2016/2017) were reported though the arrivals of the new cotton crop were being said to be in infinitesimal numbers till now.
It is surprising that though in recent weeks the prices of cotton in India and China have firmed up notably, domestic lint prices remain relatively easy with few buyers. Volume of cotton trade is also being reported in low numbers. The federal budget for the year 2016/2017 was announced earlier this month with some positive changes in the cotton economy of Pakistan. The cotton growers have appreciated the federal budget for benefits accruing in the prices of fertilizers and also in the supply of electricity. The All Pakistan Textile Mills Association (APTMA) has thanked the government for announcing restoration of Zero Rated Regime in the budget. APTMA is hopeful that more visionary steps will be taken by the government to achieve complete viability of the textile industry leading to growth in exports for the benefit of the national economy and the prosperity of Pakistan.
Pakistan Textile Exporters Association (PTEA) has thanked Prime Minister Nawaz Sharif for presenting a favourable and growth oriented budget. PTEA stated that the implementation of zero rating will remove the hurdles in export growth, thus leading to growth in employment and economic prosperity. The current crop (2015/2016) prices of cotton from Sindh are said to have ranged from Rs 4800 to Rs 5800 per maund (37.32 Kgs), according to the quality. In Punjab the lint prices reportedly ranged from Rs 5300 to Rs 5800 per maund on Thursday.
Traders said in Karachi that 25 to 30 trucks of new crop cotton from Sindh were dispatched to the ginning factories. Ginning factories pressing new crop in small quantities are said to have started or will go into production soon in Sanghar, Shahdadpur and Kotri. It is said that one factory has also started in Burewala in Punjab and has produced two lots of cotton.
One factory in Harunabad has sold four trucks of new crop cottonseeds at Rs 1800 per maund (37.32 Kgs) for delivery on 15th of June, 2016. On the global economic and financial front, the World Bank has downgraded global growth for 2016 to 2.4 percent. Thus we may gauge the growth of the global economy in dismal terms. The World Bank has further projected a sharp slowdown and slashed its growth forecasts all around the world.
As reported in the Wall Street Journal, America, Europe and Japan have failed to revive economic growth to pre-crisis levels despite unprecedented efforts by several central banks around the world to provide cheap or interest free loans for the revival or different economies around the world. The World Bank has added that the emerging economies have been hard hit by plunge in commodity prices which has hit countries from Saudi Arabia, Venezuela, Australia and China to Brazil and South Africa.
The truth of the matter is that the crisis initiated by Lehman Brothers in 2007 / 2008 is approaching a decade and no improvement in the global economy is in sight. Compounded by such events as the referendum on 23 June, 2016 in the United Kingdom which will decide if the UK will remain in the European Union, or suffer the fate of “Brexit” viz. opt out of the EU European economies are facing an impending economic turmoil of unprecedented proportions. In any case, it is well known that Greece and France have a low view of the European Union. It remains conceivable that other member countries may also consider a vote or a referendum on staying or leaving the European Union.
Euro skepticism is on the rise and rightist agendas and propagation are spreading in Europe. Recent politics in the United States is getting murkier as presidential elections during in November, 2016 are creating unprecedented fracas there in the body politic. The refugee problem originating in Africa and continuously spreading to the core of Europe and adding of the socio-political uncertainty are slowing down investment.
The World Bank has concluded by saying that while cheaper oil prices will benefit Japan, Europe and other oil importing countries, it will deeply hurt producers of crude oil in Asia, South America and in some parts of Africa. Thus we are presently facing a sizeable slowdown in global trade and economic growth.