After remaining relatively firm since the last several weeks, an easy tone has appeared on the market where both seed cotton (Kapas/Phutti) and lint prices have declined with increased arrivals. Moreover, coming Monday business will remain closed on 14th August 2017 being the Independence Day of Pakistan.
Seed cotton (Kapas/Phutti) prices have declined by about Rs 100 to Rs 125 per 40 Kgs, while lint prices are reported to have gone down by Rs 50 to Rs 75 per maund (37.32 Kgs). Traders said in Karachi on Thursday that arrivals of seed cotton and lint from both Sindh and Punjab have increased which have pressurised the prices. Thus on Thursday seed cotton prices ranged lower from Rs 2,900 to Rs 3,100 per 40 Kgs in Sindh, while in the Punjab they are reported to have ranged from Rs 2,900 to Rs 3,200 per 40 Kgs, according to the quality.
The prices of lint cotton in Sindh were said to have ranged from Rs 6,400 to Rs 6,475 per maund (37.32 Kgs), while in the Punjab they are also reported to have ranged from Rs 6,650 to Rs 6,675 per maund, according to the quality. While the global cotton prices are on the tighter side, domestic cotton prices have eased on Thursday. On the International market, besides America and China, Indian cotton prices are also well held and have reportedly increased by Rs 200 per candy.
Ready cotton sales of the new crop (August 2017/July 2018) were said to be about 12,000 bales on Thursday with cotton from Sindh stations such as Tando Adam, Shahdadpur, Kotri, Hyderabad, Sanghar and Jhol having been reportedly sold from Rs 6,400 to Rs 6,475 per maund. In the Punjab, 200 bales of cotton from Burewalla reportedly sold at Rs 6,650 per maund (37.32 Kgs), 400 bales from Vihari sold at Rs 6,675 per maund, while 200 bales from Gojra sold at Rs 6690 per maund.
In the evening, the tone of the cotton market reportedly remained on the quiet side. With an extended weekend, cotton business will resume properly on next Tuesday and thereafter. In the meantime, textile business continues to remain in problem, including the weaving sector.
On the global economic and financial front, business and equity markets had been improving in the aggregate since the beginning of this year after a particularly dismal decade following the Great Recession beginning in 2008. Even if the investors carry the hope that the upward economic drive will keep its pace, but willy nilly their hopes are starting to falter due to their increasing concerns about the political tension building up in the Korean peninsula.
The growing tensions between North Korea and the United States are having negative effects on various markets around the world and business sectors remain notably apprehensive lest a full-blown conflict erupt leading to a full scale war in the region. Confidence has been shaken in various markets around the world, be they commodity markets or equities.
Earlier, most economies around the world were striving to extricate themselves from the Great Recession and some countries even managed to push up their economies with reasonable success. However, besides their pending problems, the North Korean threat to Guam has dampened business sentiment around the world.
Besides the North Korean conundrum, other remaining economic problems around the world continue to plague the global economy. Chinese stocks were pulled down because of fears that banking regulators could continue to clamp down on risky accounts of debtors where lax financing and speculation could jeopardize the loan from payback to the lending banks. In the United Kingdom, former chancellor Lord Darling has warned the authorities that consumer debt in the British economy is a “growing concern”.
Reports have been received from the Middle East where markets were depressed earlier in the week reportedly due to low oil prices, austerity programmes of the government and also due to the escalating tensions between North Korea and the United States. Sentiments in many markets were also low when a car rammed into soldiers in a Paris suburb which injured six of them on Wednesday.
In conclusion, it is now observed that while United States President Donald Trump has warned that North Korean threats to America will be met with “fire and fury like world has never seen”, North Korea has retorted that it will bomb Guam where the U.S. has a large military base. No wonder that the equity prices dropped in many parts of the world.