Local cotton factory.—File Photo

KARACHI: Cotton market on Saturday lacked normal trading interest as ginners and spinners remained locked in price war owing to unsettled conditions on the major world trading centres.

Floor brokers said the weakness of the New York cotton futures did not allow global markets including the local one as perceptions of cheaper imports continue to haunt local ginners who could not precisely react to the changing world news.

They said mill buying was falling each session because of slack demand of cotton yarn by the local ancillary industry and inventories of unsold stocks were building up.

They said China and India are also facing problems of various types in their respective countries linked to the textile trade.

The sharp decline in imports of lint by China seems to have chain impact on the falling world rates and the local market is also the victim of buying support rather than any other local problem as the crop is enough to meet the annual consumption demand of the industry, they said.

“Local prices should have further declined from the current levels but active support extended by the private sector exporters is keeping the market afloat,” said chairman of Karachi Brokers` Forum, Naseem Usman.

He said the world textile industry was heading for a big crisis owing to problems on the textile export front and sharp fall in demand of major consumers.

He said more than three dozen ancillary textile units in Bangladesh have been reportedly closed because of the brewing crisis and disturbing reports are also coming in from other countries.

Official spot rates were again held unchanged but stray lots in the ready section changed hands according to quality.

The following are some of the deals reported by the Karachi Brokers` Forum on Saturday: 400 bales, Sultanabad at Rs4,000, 400 bales, Mianwali at Rs5,700, 400 bales, Fort Abbas at Rs5,200, 400 bales each, Chistian, Fort Abbas and Hasilpur at Rs5,200 and 400 bales, Pir Mahal at Rs5,300.

It was in this background that the official spot rates were quoted higher by Rs100 per maund at Rs5,800 but most of the deals were based on quality of lint in trade. - File photo

KARACHI: Cotton prices on Wednesday tended further higher as spinners and mills resumed their normal daily intake and ginners were quick to take advantage of the rising demand.

Floor brokers said some of the fine lots from the southern Punjab cotton belt were traded as higher as Rs6,000 per maund, up Rs300 from the previous closing rates.

“There was no apparent bullish reason behind the snap rally but some said it may be due to a fight between the big ones to grab the floating stock of fine lots”, they said.

They said the latest mill buying spree may have been caused by the perception that the duty-free relief given by the EU to 75 items, notably textiles could boost exports to any highs.

The more surprising fact was that the local market trend was quite the reverse of the global markets, notably New York cotton futures, which are again on the decline, they added.

However, the run-up despite reports of a bumper crop reflects that textile sector was heading for a record exports during the coming years as the EU is one of the major textile importer, its previous annual bill being around $3.5 billion, textile sources said.

It was in this background that the official spot rates were quoted higher by Rs100 per maund at Rs5,800 but most of the deals were based on quality of lint in trade.

The New York cotton futures on the other hand were lowered by 1.74 and 1.77 cents at 94.97 and 96.06 cents per lb for both the ruling March and forward May contracts respectively.

The following are some of the notable deals reported by the Karachi Brokers Forum on Wednesday:

SINDH TYPE: 200 bales and 400 and 800 bales, Mirpurkhas, Hyderabad, Kotri Khadro and Shahdadpur at Rs4,600.

PUNJAB VARIETY: 600 and 400 bales, each Khanewal, Yazman and Bahawalpur at Rs6,000, 1,000 bales, Rahimyar Khan at Rs5,900 to Rs6,000, 2,400 bales, Bakhar at Rs5,850, 1,000 bales, Chichawatni at Rs5,800, 2,400 bales, Sadiqabad at Rs5,750 to Rs6,000, 200 bales, Uch Sharif at Rs5,700, 800 bales, Lodhran at Rs5,600 to Rs5,800, 1,000 bales, Fort Abbas at Rs5,575 to Rs5,750, 1,000 bales, Dahranwala at Rs5,250,and 200 bales each, Faqirwali and Haroonabad also at this rate.

According to official figures, around 11.1 million bales reached ginneries and little less than last year the spinners have lifted cotton so far because of gas and power shortages in Punjab where industry on average is shut for four days a week.

KARACHI: The All-Pakistan Textile Mills Association cautioned on Wednesday that the government could incur a loss of Rs10 billion if the Trading Corporation of Pakistan (TCP) procures one million bales from ginners.

Aptma chairman Mohsin Aziz said in Karachi on Wednesday that unsold stocks of around two million bales presently lying with ginners are affected by flood water and if the government allows TCP to procure the same, it would result in loss to the national exchequer.

Mohsin Aziz attributed bigger holding of two million bales with ginners this year as compared to 1.2 million bales last year to gas and power shortages in the Punjab that curbed demand of the industry.

He said that when the government abstained from intervening in the period of cotton shortage last year, it should not have interfered in this matter this year when the supply situation has reversed.

He said in case government allows the TCP to lift one million bales as being demanded, it would create another scam because price of flood affected cotton held by ginners is not more than Rs3000 per bale against current market price of around Rs3600 per bale.

According to official figures, he said up to Dec 15, around 11.1 million bales reached ginneries and little less than last year the spinners have lifted cotton so far because of gas and power shortages in the Punjab where industry on average is shut for four days a week.

Meanwhile, Mohsin Aziz said the cotton assessment committee had placed total production of cotton this season at 12.2 million bales which indicates that if industry is run at full capacity, there would be shortage of cotton for domestic consumption.He felt that the decision of TCP’s intervention would not benefit growers as 90 per cent of the crop had already reached ginners.

Mohsin Aziz also rejected the notion that there was only one buyer (spinners) in the market and said that private sector exporters were also active and have booked cotton for export up to 450,000 bales for far.

The committee expressed concern over frequent absence of the Minister for Textile Industry Makhdoom Shahabuddin. - File photo

ISLAMABAD: National Assembly Standing Committee on Textile Industry on Monday asked the government to direct the Trading Corporation of Pakistan to start buying cotton from growers.

The legislators had expressed their resentment over exploitation of cotton growers as they were not presently getting fair price following a fall in the price in the open market.

“The government must direct the TCP to immediately start buying cotton from growers at the rates prescribed by the government,” said chairman, Standing Committee, MNA, Haji Mohammad Akram Ansari.

The committee was informed that the arrival of phutti from cotton fields in the Punjab to ginners reached 9.650 million bales till Dec 1, showing an increase of 16 per cent during the period under review over last year.

A presentation was given over cotton production, showing that higher production of cotton in the Punjab had helped offset damages and losses caused by recent rains and floods in Sindh to standing crops.

As a result, the committee recommended that the issue of cotton purchase by the TCP should also be taken up by the government in its cabinet meeting on Dec 14.

The committee expressed concern over frequent absence of the Minister for Textile Industry Makhdoom Shahabuddin.

“The minister should ensure his presence in the next meeting,” the committee members unanimously said.

In the past few meetings, the committee had frequently invited Mr Shahabuddin to meetings of the standing committee to reply to the queries of the members over performance of textile and clothing industry.

Secretary, Ministry of Textile Industry, Shahid Rashid, briefed the committee on textile policy implementation. He informed that the ministry had signed a memorandum of understanding with the EOBI and social security departments of Punjab and Sindh to reimburse EOBI and social security of women and handicapped employees working in the textile sector from the date of commencement of the textiles policy in October 2009.

Mr Rashid informed that in proposed Textiles Industry Development, Promotion and Standards Act, the clause pertaining to levy of cess has been modified. He also briefed the committee on disbursements made to textiles sector in various schemes under Textiles Policy, including recent-release of Rs2 billion for drawback of local taxes and levies.

The member highlighted various flaws in the said policy wherein small industrialists have been ignored.

The members also expressed reservations over non-refund of claims to industrialists whereby the committee recommended that the government may provide sufficient funds in this regard.

The committee also discussed draft textile bill aimed at development, promotion, regulation and setting of standards for the textile industry in Pakistan to achieve a sustainable growth, employment generation, increased productivity and value-addition throughout the textile chain and deferred it for the next meeting.

Official spot rates were again held unchanged at the last level of Rs5,300 per maund and stray lots were traded around this level. - File photo

KARACHI: Trading resumed on the cotton market on Wednesday on a firm note as stray lots changed hands at the higher rates amid slow trading.

Mills ready off-take, however, remained on the lower side because of two official closures on account of Ashura and delivery problems, but dealers expect normal resumption of activity by Thursday.

The said prices seemed to have stabilised above the resistance level of Rs5,000 per maund for the fine type and speculate further increase in the coming weeks.

Naseem Usman, chairman, Karachi Brokers Forum, based his higher future price outlook on latest production figures released by the world`s major cotton producers, including China and India.

According to him, both the countries, notably China, have so far harvested, lower crop as compared to their previous production figures and future outlook also did not appear that encouraging.

“Mid-season arrival figures, he claims, always give a fair idea of the total crop and both are terribly deficient, notably China, where the crop is reportedly being replaced by some other crop, notably wheat.”

But luckily Pakistan is expected to be on the threshold of harvesting a good crop despite crop losses owing to rains and floods in the lower Sindh.

Some of the leading spinners also hold the same view and hoped if all goes well with the crop in the coming weeks, prices may remain stable limiting imports.

Official spot rates were again held unchanged at the last level of Rs5,300 per maund and stray lots were traded around this level.

Owing to two closures and delivery problems, mill ready off-take was light totaling about 2,000 bales as under: 1,000 bales, upper Sindh at Rs5,100 to 5,200, 400 bales, Garma Raja at 4,900 to 5,000 and 400 bales, each Sadiqabad and Rahimyar Khan at 5,300.

The International Cotton Advisory Committee forecasts that rising mill use and lower cotton prices could fuel a rebound in world cotton trade in 2012-13. - File photo

KARACHI: Increased flow of phutti from cotton fields in the Punjab to ginneries during the last fortnight (Nov 15 to Dec 1) has raised hopes of larger harvest of cotton this season.

According to official figures, around 9.650 million bales reached ginneries up to Dec 1, showing an increase of 15.47 per cent in cotton production over the corresponding period of last year.

The country has, so far, harvested around 1.293 million more bales over the corresponding period last year.

Higher production of cotton in the Punjab helped to offset damages and losses caused by recent rains and floods in Sindh to standing cotton crops.

The figures show that phutti arrival in the Punjab was fabulously high at 43.30 per cent at 7.540 million bales as against 5.262 million bales recorded in the same period last year. This means that the Punjab produced around 2.278 million more bales this season so far.

Against this, the heavy damages caused by floods and rains to standing cotton crops in Sindh reduced production by a big margin of 31.84 per cent at 2.109 million from 3.095 million harvested in the corresponding period last year. Therefore,
Sindh has, so far, produced 0.985 million less bales this season.

Higher flow of phutti in the Punjab during the outgoing fortnight has resulted in production of 0.777 million more bales at 1.681 million bales compared to 0.904 million bales produced in the same period last year.

The mills purchase during the new season has so far remained at 7.269 million bales compared with 5.886 million bales recorded in the corresponding period last year.

Exporters have lifted around 342,959 bales as against 398,070 bales in the same period last year.

The ginners were also holding larger quantity of unsold stocks at 2.038 million bales up to Dec 1, compared to 1.080 million bales held by them in the corresponding period last year.

Meanwhile, International Cotton Advisory Committee in a report observed that after jumping to record highs in 2010-11, cotton prices dropped sharply in the current season, reducing farmers’ income and decreasing for the first time in three years the attractiveness of this crop when compared to that of its main alternatives.

The report further stated that as a result, the committee projects global cotton area to contract in 2012-13 by eight per cent to 33.3 million hectares and production to decrease by six per cent to 25.1 million tons.

Cotton production is expected to decline in most large producing countries, with the exception of the United State, Uzbekistan and Australia.

Following two seasons at depressed levels, global cotton mills used its forecast to start growing again in 2012-13. This expectation is highly dependent on the assumption of a recovery in global economic growth that would stimulate purchases
of textile products and consumption of raw fibers. The ICAC forecasts global cotton mill use to rise by three per cent in 2012-13 to 25.0 million tons, driven by Asia.

The International Cotton Advisory Committee forecasts that rising mill use and lower cotton prices could fuel a rebound in world cotton trade in 2012-13.

Imports and exports are expected to jump by nine per cent to 8.4 million tons. As global production and consumption are expected to roughly balance in 2012-13, global cotton stocks are forecast to increase only slightly, to 11.6 million tons.

Official spot rates did not show any change and were again firmly held at the previous level of Rs5,200, although some of the fine lots were traded Rs100 higher than them. - File photo

KARACHI: Physical activity on the cotton market further shrank to a modest proportion on Monday as pricing ideas between sellers and buyers failed to find a meeting ground.

Unlike the previous week, both ginners and growers did not opt to sell their stocks of lint and phutti below their parity levels and firmly held on to their unsold positions, market sources said.

Last week phutti and lint prices had fallen below Rs2,000 per 40 kg and 5,000 per maund and as a result, stakeholders took a united stand to hold on to their positions rather than selling at the decline.

According to the chairman of Karachi Borkers Forum, Naseem Usman, a delegation of Pakistan Cotton Ginners Association met the Prime Minister in Multan last week and apprised him of the developing situation on the cotton front amid steep decline in prices.

A general body meeting of the PCGA members in Multan is going to suggest steps to ensure fair prices for both growers and ginners,he said.Physical activity on the ready market was at a low, although some of the lots, which changed hands were done on the higher rates as compared to the last weekend, dealers said.

Official spot rates did not show any change and were again firmly held at the previous level of Rs5,200, although some of the fine lots were traded Rs100 higher than them.

The following are some of the lots, which changed hands according to Karachi Brokers Forum:

SINDH TYPE: 400 bales, inferior quality, Mirpurkhas at Rs3,800, 800 bales, uppers Sindh at Rs51,00 to 5,150.

PUNJAB VARIETY: 400 bales each Rajanpur and Fazilpur at Rs5,300, 200 bales, Vehari at Rs5,200, 200 bales, Bahawalnagar at Rs5,100, 1,000 bales, Rahimyar Khan at Rs5,200, 400 bales and Sadiqabad at Rs5,150 to 5,200.

Official spot rates were again lowered by Rs200 per maund at Rs5,200 but leading ginners were reluctant to sell at these rates. - File photo

KARACHI: Physical business on the cotton market on Friday shrank to a modest proportion as ginners held on to their positions and did not sell at the falling prices.

After having fallen by Rs700 to 800 per maund during the last couple of sessions from Rs5,800 and above it to 5,100, fine varieties fetched the highest rate of Rs5,300 on Friday.

Floor brokers said both the growers and the ginners have decided to hold on to their parity levels after prices have fallen below their minimum rates.

They said both claimed owing to higher cost of input, notably urea and pesticides, it was not possible to sell their products at the lower rates.

The current pause may or may not forestall fresh fall in prices as the market is in part being guided by the global developments on the commodity trading centres, some analysts feel.

As a result, much of the activity remained confined to fine lots from the southern and central Punjab ginneries and most of the deals were done at an average rate of Rs51,00 per maund.

Official spot rates were again lowered by Rs200 per maund at Rs5,200 but leading ginners were reluctant to sell at these rates.

The following are some of the notable deals reported by the Karachi Brokers Forum on Friday: SINDH TYPE:

2,000 bales, upper Sindh at Rs5,000 to 5,100, 400 bales Nawabshah at 4,500, 400 bales, Sanghar at 3,700 and 400 bales, Sultanabad at 3,510. PUNJAB VARIETY:

1,800 bales, Shadan Lund, 1,000 bales each Bahawalpur, Chichawatni, at 5,100, 800 bales, Layyah at 5,100 to 5,200,1,400 bales, Rahimyar Khan at 5,150 to 5,300, 3,000 bales, Khanewal at 5,150 to 5,200, 400 bales, Shujabad at 5,200, 200 bales, 600 and 1,000 bales, Noorpur, Rajanpur and Sadiqabad at 5,300.

According to him, a reduction of 150 basis points in rates to produce export surplus has failed to push credit off-take, which means the interest rate is still on the higher side. - File photo

LAHORE: All-Pakistan Textile Mills Association (Aptma) chairman Mohsin Aziz has said that massive decline in textile exports in October, both in value and quantity, is alarming and this trend is likely to continue in future unless energy and interest rate issues for the textile industry are addressed.

Citing the IMF view of Pakistan’s economy, he said that it has endorsed the Aptma concerns regarding sluggish economic trends, particularly rising trade deficit amidst dwindling exports.

According to him, textile exports though had increased in value during the first four months of the current fiscal year, all textile exports declined in quantity terms in October due to gas supply gaps as industry has been denied gas supply for 120 days during 2011.

Further, he said, high interest rate was restricting industry’s expansion. According to him, a reduction of 150 basis points in rates to produce export surplus has failed to push credit off-take, which means the interest rate is still on the higher side and both commercial and industrial borrowers are reluctant on further financing.

He said the SBP should reduce the discount rate by 250 basis points in the upcoming monetary policy on Nov 30 to ensure single digit mark-up in the country.

Official spot rates were lowered by another Rs100 per maund at Rs5,500, while bulk of the business in the ready section was based on quality. - File photo

KARACHI: The recent creeping decline continued on the cotton market on Wednesday as ginners were again active sellers at the ruling prices amid an actively traded session.

But on the other hand, New York cotton futures turned mixed while the forward March managed to end with a modest recovery of 0.71 cents at 91.12.

The ruling December remained under pressure and shed another 0.86 cents at 89.95.

On the local market, however, panic among ginners and growers continued; haunted by a bumper crop and steady arrival of phutti into ginneries.

Analysts said the technical breather taken by the global speculators indicated that a further price decline has been averted and in the coming sessions both the contracts are expected to stay firm above the 90-cent per lb mark.

They were, however, unsure about the reaction of the local market to positive global developments but ruled out any massive upward revision in the prevailing prices above the 60 cents per lb mark as the talk of a higher crop ideas continue to have
negative bearing on growers holding capacity.

Floor brokers said the disturbing factor was that some of the fine lots from the upper Sindh areas were traded below Rs5,000 per maund, while central Sindh type was sold between Rs3,500 and 4,500 per maund on the lower side.

Punjab variety was mostly traded well above Rs5,000 per maund and some of the fine lots around Rs5,625 but average rate remained confined to Rs5,400 per maund, they said.

Official spot rates were lowered by another Rs100 per maund at Rs5,500, while bulk of the business in the ready section was based on quality.

The following are some of the notable deals reported by the Karachi Brokers Forum on Wednesday:

SINDH TYPE: 1,000 bales, Mirpurkhas at Rs3,500 to 4,000, 400 bales, Tando Adam at Rs4,300, 400 bales, Sakrand at Rs4,500, 2,000 bales, Khairpur at 4,900 to 5,000 and 2,000 bales, upper Sindh at Rs5,300.

PUNJAB VARIETY: 600 bales, Bahwalnagar at Rs5,150 to 5,300, 400 bales, Chistian at 5,150, 400 bales, Hasilpur at 5,200, 1,000 bales, each Ahmedpur East and Bahawalpur at Rs5,300, 1,000 bales, Rahimyar Khan at Rs5,400 to 5,600, 1,200 bales, Khanewal at Rs5,375 to 5,500, 1,000 bales, Kabirwala at Rs5,400 to 5,500, 600, 400 and 200 bales, each Bakhar, Ghazi Ghat, Sadiqabad, Qabola, Gaggon, DG Khan, Multan and Layyah at Rs5,500, 1,200 and 400 each Fazilpur, Mianwali and Rajanpur at Rs5,600 to 5,625.