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KARACHI: Cotton prices become duller (September 30, 11)

KARACHI: Cotton prices become duller

As a result, the fibre quality is also said to be improving, even in the beleaguered Sindh province for whatever output is left from the ravages of the weather. Now we deem the total estimated output in Pakistan to range from 12.5 million to 13 million domestic size bales on an ex-gin basis. Estimates of mills consumption remain unchanged from 13 million to 13.5 million local size bales, exports are projected to range between 0.5 million to one million bales and imports should range from one million to 1.5 million bales.

On Thursday evening, it was learnt that some exporters were interested in the market. However, mills sources that the price of upland cottons from India which were being quoted from 110 to 111 cents per pound are now available at five to six cents cheaper for a pound. Global rates of cotton in previous weeks were said to be somewhat higher but now a sort of bearish sentiment is being perceived by the traders. Consequently due to slow demand the yarn prices also appeared subdued.

Mills remain worried regarding low supply of gas and power to their units throughout the country. Last week's rise in lint prices were indicative of less or depleted inventories which the mills were carrying from the previous season (2010-2011). Now the domestic mills desire to build up their cotton inventories gradually. Seedcotton (Kapas/Phutti) prices in Sindh reportedly ranged from Rs 2,300 to Rs 2,800 per 40 kgs and from Punjab the seedcotton was being offered from Rs 2,000 to Rs 3,000 per 40 kilograms. Sale of cotton were reported from Sindh being 1000 bales from Khairpur district and another 1000 bales from Upper Sindh which both were said to have been sold at Rs 6400 per maund (37.32 Kgs).

Lint prices were down later in the evening upto Rs 200 per maund (37.32 Kgs) as there was no rush in mills buying. Moreover, the decline in lint and yarn prices were said to reflect the weak global sentiment in this respect. With New York cotton futures perceived to be under pressure, Pakistan mills are mostly biding for time as far as their purchase policy is concerned.

Recently the Karachi Cotton Association (KCA) elected its chairman, vice chairman and its managing committee for the year 2011-2012. Mr Sohail Naseem, a leading exporter, was elected as the chairman while Naser Wahab, a veteran of cotton trade became the vice chairman. Members of the managing committee include Amin A. Hashwani, Anwer Haji Karim, Asif Inam, Amir Javed, Fayyaz Umar, Imran Maqbool, Jajangir Moghal, Khawaja Tahir Mahmood, Mohammad Sohail, Nadershaw D. Kabraji, N.S. Chawala, Nasir Anwar Barkkhudaria, Rehan Shaukat and Syed Muhammad Sameer.

On the global economic and financial front, the system in vogue, or whatever you may call it, is not working. It has clearly stalled. Equity markets sunk last week in a big way. Both the United States and Europe continued to emit signals of serious downturn in their economic condition. Even China posted a disappointing manufacturing data. Commercial confidence remained bad in both the United Kingdom as well as the United States of America. The peripheral economies of the Europe such as Greece, Spain, Portugal, Italy and Iceland are sinking deeper into a dangerous economic morass.

With the condition of the global economy being reported as the worst since the Second World War, or even worser than the 1929 recession, now European and American leaders are blaming each other for the prevailing economic disaster facing the world.

On the one hand, US treasury secretary Timothy Geitner believes that Europe's debt crisis is the greatest economic problem in the world. On the other hand, Prime Minister Manmohan Singh has described the prevailing global economic downturn as worst than that of 2008 and the United States economic problems are worse than the European problem. Crisis continues in international banking and the economic systems. Even in Germany, the hitherto unshaken economy of Europe, business confidence is reported to have fallen for the third month. Chancellor Angela Merkel is blaming United States for not putting its house in order which has also been reiterated by China saying that the United States has not only failed to keep its house in order but is exporting its economic weaknesses to other countries of the world by default.

At the weekend German parliament was debating the issue of whether Germany should bailout southern Europe by pumping Dollars Six Hundred billions to control the faltering economy of the peripheral Eurozone economies which have gotten from bad to worse. Greece is deemed to be the epicentre of all the ills and misfortunes which have befallen the Eurozone. In the meantime, the Chairman of the International Monetary Fund (IMF), Christine Lagarde has asked for a quick action to save the global economy which has entered the danger zone. She called for a collective drive and to seek a common solution to the global economic and financial ills as we are all strongly interconnected with each other.

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