Firm trend persists on cotton market
Firmness prevailed on the cotton market on Wednesday as ginners did not bring down the rates, particularly for fine type. Official spot rate was unchanged at Rs 5,650. In the ready business, 9,000 bales of cotton changed hands between Rs 5500-5800. In both the Punjab and Sindh, the seeds cotton (low variety) shed Rs 50 to Rs 2400, the (fine type), however, gained the same amount to Rs 2700 due to strong demand.
According to the market sources, there were demands by the mills but growers and ginners tried to keep on the sidelines just to avoid selling at the lower prices. They (growers) have their own strategy because prices of cotton were falling amid steady supply, so, they decided to adopt a cautionary measure for the rainy days.
Cotton Analyst Naseem Usman said that prices may not fluctuate sharply ahead of long week-end amid tight supply of seed cotton. According to the Reuters, on Tuesday, the US cotton futures sank more than 3.5 percent, their biggest one-day loss in over two months, as investors either locked in profits from recent gains or fled risky assets amid concerns about weak physical demand.
Retracing ground it made last week, the most-actively traded December cotton contract on ICE Futures US settled at 74.27 cents per lb, down 3.4 percent, after falling to an intraday low of 73.93 cents. Prices hit their highest level since May last Thursday, just below 80 cents. The pressure halved the inversion between December and the March contract, which emerged last week, to 0.5 cent. The March contract slipped 1.9 percent to 73.94 cents. Selling helped to buoy volumes, with 27,096 lots changing hands on the day, well above the 30- and 250-day averages.
The following deals reported: 400 bales from Shahdad Pur (Payment after Eid) at Rs 5600, 200 bales from Sahari (Payment after Eid) at Rs 5600, 200 bales from Hasil Pur at Rs 5500, 200 bales from Shujabad at Rs 5550, 1000 bales from Kehror Lal Esan at Rs 5600, 400 bales from Dunia Pur at Rs 5600, 400 bales from Khanewal at Rs 5650, 600 bales from Bahawal Pur at Rs 5650-5700, 200 bales from Lodhran at Rs 5650, 400 bales from Uch Sharif at Rs 5700, 400 bales from Burewala at Rs 5700, 800 bales from Layyah at Rs 5700, 400 bales from Mian Chano at Rs 5725, 400 bales from Bakhar at Rs 5800, 2200 bales from Rahim Yar Khan at Rs 5800 and 400 bales from Mian Wali at Rs 5800.
US CG, APTMA agree on joint working strategy for market access
All Pakistan Textile Mills Association (APTMA) and the US Consul General Nina Maria Fight have agreed on a joint working strategy for resolving the issues confronting the industrial growth of Pakistan due to a limited US market access.
This consensus was evolved between the APTMA leadership and the US Consul General Nina Maria Fight at the APTMA House the other day. Central Chairman APTMA Ahsan Bashir, Chairman APTMA Punjab Shahzad Ali Khan and members of Central Management Committee (CMC) were also present on the occasion.
She explained in detail as how US government is helping out Pakistan in energy projects. She said the US is also working on smaller projects with Discos to deal with the problem of efficiency and circular debt. She said there is a need for consistency in policies on the part of Pakistan. She assured the APTMA leadership of facilitating it in discussion with the Washington on textile tariff lines.
According to her, the Free Trade Agreement (FTA) is not necessarily a quick process and the government of Pakistan is considering a bilateral investment treaty with the US. The US has given its consent and there is a need to speed up the process in Pakistan, as it would be the first step towards the FTA, she added. On supplying quality cotton seed to Pakistan, the US envoy said that the US firm Monsanto has concerns about the Intellectual Property Rights (IPRs).
According to her, a new visa procedure is in the process on the part of the US in order to simplify the filing process and it is likely to be finalised soon. She also urged the businessmen to keep abreast the US Consulate in case they are not treated well on their visit to the US, assuring of taking any such feedback seriously.
She said she was open to ideas on improvement in bilateral trade relations. She said a structural continuity is required to continue with negotiations of bilateral trade. Speaking on the occasion, the APTMA central Chairman Ahsan Bashir said that the textile value added industry is not able to compete in the US market due to preferential trade agreement with the competitors.
He said Pakistan textile exports are not more than 3 percent to the US due to limited market access and added that Pakistan exports may reach to $30 billion in three years if raw materials exported to the US are converted to garments. He said the competitors are using Pakistan's raw materials to export to the US and the West. He further clarified that the garment industry is not energy-intensive therefore energy shortage in Pakistan is not an impediment for the garment industry if the market access is provided with by the US.
Chairman APTMA Punjab, Shahzad Ali Khan said that Pakistan textile industry had no threat from trade opening with India provided that there are no trade and non-tariff barriers from India in place. The APTMA CMC members also exchanged their views on the occasion.
Cloth sale declines ahead of Eid-ul-Azha
Clothing vendors in Karachi reported slow sales ahead of Eid-ul-Azha. Sale of readymade garments on Eid-ulAzha has declined as compared to Eid-ul-Fitr. Sale of readymade clothes surged as the affluent people can afford it on Eid-ul- Azha, ashopkeeper said. A garment seller in Saddar area said that his business over the past week was witnessed slow.
He said that the majority of people is highly dependent on tailors to get their Eid dress stitched. Keeping the situation in view, the tailors also demand double charges for their skill. A shopkeeper of readymade garment said that he is ready to reduce garments' prices despite the rising costs of raw materials in varying proportions. "I prefer to sell my products for small profit.. It does not feel like a holiday this year," he laments.
"Many people decided to skip buying new clothes in order to meet the expenses of sacrificial animals and other expenses of Eid. A quick look at the price tags of readymade garments in the windows indicates that shop owners decided to slash prices or hanged posters offering sale at reduced price to encourage customers. "The real loss for merchants would be if a large stock of readymade garments are not sold and remains in the warehouses." said a shop owner.
Cotton market: prices move cautiously on weak demand
Prices moved cautiously on the cotton market on Monday amid lack of buying interest by mills and spinners mainly because of easy supply seed cotton. Official spot rate managed to resist further decline, holing the week-end level at Rs 5,650. In the ready business, 12,000 bales of cotton changed hands between Rs 5500-5750. The seedcotton prices depicted modest gain of Rs 50 in the Punjab and Sindh at Rs 2450-2750.
According to the market sources, mills were not taking so much interest in fresh purchasing as it appeared that so far they have bought, which are enough to meet their near terms. The second major reason is, cotton analyst, Naseem Usman, said that mills were supposing a modest fall in the rates in the coming days.
Thanks to the slight surge in the foreign demand, which is helping local cotton traders to run their business, they said and adding that under the circumstances when electricity and gas supplies are shedding down, despite the fact that consumers are paying huge amount to the concerned departments. As far as, country's textile sector is concerned, it is the largest manufacturing sector and export revenue earner, is struggling in the face of frequent power and gas cuts, hopefully, progress in latest technology is likely assist the spinners and mills to cope with the current power crisis. They said that trading activity may come down ahead of holiday owing to the transportation problem.
New York cotton sinks over 3.5 percent; investors flee risk
US cotton futures sank more than 3.5 percent on Tuesday, their biggest one-day loss in over two months, as investors either locked in profits from recent gains or fled risky assets amid concerns about weak physical demand. Retracing ground it made last week, the most-actively traded December cotton contract on ICE Futures US settled at 74.27 cents per lb, down 3.4 percent, after falling to an intraday low of 73.93 cents. Prices hit their highest level since May last Thursday, just below 80 cents.
The pressure halved the inversion between December and the March contract, which emerged last week, to 0.5 cent. The March contract slipped 1.9 percent to 73.94 cents. Selling helped to buoy volumes, with 27,096 lots changing hands on the day, well above the 30- and 250-day averages. After last week's 7-percent gains, the sell-off in fibres was more pronounced than in the broader commodities market.
The Thomson Reuters-Jefferies CRB index, a global benchmark for commodities, settled down 1.2 percent, near a 2-1/2-month low, with natural gas the only commodity among the 19 tracked by the CRB to show gains. The euro was also under pressure, hitting a one-week low against the dollar, as concerns about a global economic slowdown returned to the fore. Confidence was shaken by disappointing quarterly earnings from global industrial companies, DuPont and United Technologies, seen as barometers for global economic health.
Markets were also nervous as the US Federal Reserve started its regular two-day meeting, with Chairman Ben Bernanke expected to main his accommodating monetary policy amid signs of a slowdown in the world's largest economy. Demand for cotton has evaporated after the rally in prices. "Fundamentally, mills are sidelined as prices are unacceptably high and merchants are unwilling to offer deep enough discounts to stir interest," said Sharon Johnson, cotton specialist at Knight Futures. "Producers added to their sales last week, but are being more circumspect about additional sales at current prices."
Even so, speculative investors and traders have added to their bullish long positions and covered their shorts. Open interest, the number of outstanding contracts, slipped 549 lots to 207,329, but was still at highs last seen in February 2011, shortly before prices topped out at $2.27 per lb. Tentative signs of increasing stocks emerged with a rise of 352 480-lb bales in material pending USDA review overnight to 1,804 bales. Traders were watching for more significant inflows of material though as the US harvest continues apace. As of Sunday, some 38 percent of crops in 15 states had been harvested, according to the US Department of Agriculture's weekly report.
That is on track with the five-year average of 39 percent and up from 28 percent in the previous week. Crop conditions were unchanged from the previous week, with 31 percent rated "good" and 11 percent "excellent". Some 98 bales of new certified stocks arrived but they were mostly offset by a decertification of 85 bales, taking overall stocks to 8,446 bales.
