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Ginners push cotton prices up
SHAFI AHMAD SYED
KARACHI (April 26
2004): Scenario change in world cotton prices came
to ginners rescue who in order to measure buyers'
will pushed prices higher during the week ended on
April 24, 2004. But it worked only partially as
buying support contracted to modest size at
intervals, sources said.
The spot rate thrice raised to a total of Rs 2875.
On Saturday spot reduced by Rs 25 to Rs 2850.
WORLD SCENARIO: Rising trend sustained in world
cotton futures rate attributed to mainly
speculative in buying at the peak of May/July
rollover.
However, futures on the opening day ended firmer
on combined fund and commercial buying with
players now looking toward first notice day in the
May.
Traders observed that cotton market was behaving
as if there will be trading house which will take
delivery of the cotton when first notice rolls
around April 26.
On Tuesday futures were lower as fund contented
themselves with liquidating position in May.
Fundamentally the market is keeping tabs on
progress of plantings in US and China. The third
days trading turned firmer as speculative funds
were buyers during May/July roll over before first
notice next week, analysts said more upbeat
technical picture compared with the prior session
brought the bullish optimism back into the market
on Thursday futures handed higher with nearly May
touching 4-week peak on speculative buying near
the end of May/July rollover.
Switching positions from May cotton into July
before May's first-notice day was dominant
feature.
A weekly USDA report on export sales had little
effect on trading. A USDA export sales report
showed shipment from US was at 323,400 RBS
combined cotton sales jumped to 393,900 RBS.
On Friday cotton futures was mixed in last ditch
rollover. May eased and active July advanced as
players adjusted positions in final contract
rollover. But concerns in the market about dry
weather in the US SE cotton growing areas prompted
speculative buying.
Meanwhile cotton is watching progress of plantings
in the US and China, whose big buying last year
powered prices to their highest level since late
1995.
LOCAL TRADING:
The cotton futures in New York poised for a rise
prompted ginners in Pakistan to lot their pent-up
feeling exposed with a raise of Rs 25 to Rs 2825
on the very first day. Then the prices never
looked back though spinners punished sellers by
recording from the market at times looking it
absolutely deserted.
The Igatex exhibition which concluded the other
day had little impact. Or it was not properly
propagated to leave it mark. However, the first
day reported nil following declaration of spot
rate up Rs 25 to Rs 2825. But the ginners said
that the trend in cotton will bring back spinners
to minimise loss or to regret.
The DMR on Tuesday reported some deals struck on
Monday, in price range of Rs 2600 and Rs 2925. The
supply of regular deals is still not being met.
Spot rate remained unchanged at Rs 2825. Third
days business report was not available though two
deals reported in DMR at prices Rs 2800.
On Thursday a compromise was tacitly reached,
because nearly 3000 bales of cotton changed
between Rs 2600 and 3000. All deals were of Sindh,
Punjab cotton was held back expecting it to pay
back with premium.
The trading report was not passed on Saturday.
However, spot rate was considered not feasible and
corrected within ours, spot was reduced by Rs 25
to Rs 2850 without ST and upcountry expenses.
The Monday trading will depict how the reduction
in price has been received by the hard up
spinners.
A PIOUS WISH:
A recent report on cotton about new crop was
likely to settle the price issue could be well be
doubled a pious wish. In Punjab cotton sowing is
yet weeks away.
The price could be reasonable if exploitation of
opportunity to reap a harvest through shrewd
mechanism is avoided by all the players. Strangely
the crop estimate remains wide apart with the
buyers and sellers - latter always have an eye on
production being low while the former through
various statement do not tire that crop has been
bumper.
The estimate should not be held hostage to serve
individuals interest. Unfortunately country and
its economy is not much of concern. God, bless, if
cotton or any crop is shower of lover is
considered as such, then idea of give and take
should come to play from what everyone repeats for
greater good of the country. Taken today's heart
burning of the ginners, over 1400000 bales of
cotton pending with the ginners are burden some,
while high prices are which are hit hard on claim
that exports will suffer and many people would
lose jobs. If ginners search their heart as so the
spinners why both consider themselves at the
receiving end.
The ginners immediately raise the prices whether
other market demands so or not. Similarly, if
cotton prices depict bullish fervour, spinners sit
on sideline without lifting a bale and even
threaten to import cotton.
So the problem with major players in cotton and
its product is self-interest premise of which they
deliberately hold fast. Why can't they look beyond
their nose, knowledgeable circles summing up the
matter posed a question.
NIAB'S PERFORMANCE:
The Nuclear Institute of Agriculture Biology (NIAB)
has done commendable work so far in contributing
seeds of various crops more particularly of cotton
crop.
The institution is stated to be receptive to the
changing pattern of requirement such as pest
resistant, more yield giving and making seed
worthy of cultivation on salt-affected land. With
exception one or two, all breeds have worked well.
The Niab set-up about three decades to be by
changing their pattern.
The Most effective and useful Niab-78, so called,
brought revolution in cotton production. According
to the story production was boosted from just four
million bales to 12 million bales.
The farmers who are subject to natural vagaries
have now increased their income by 31.12 billion.
Another variety is Niab-86 said to be suitable for
the cultivation of salt affected soils. According
to circles the most dubious variety evolved till
today was Niab 26, which brought allegedly tears
for the farmer. Circles wonder, why so devastating
variety was at all suggested for the use. But in
one or two season the variety was found
susceptible to cotton leaf curl virus (CLCV).
The initial growth is said to have charmed the
farmers. They were however shocked to learn at the
flowering stage that it charmed the virus also
leading to crop devastation.
The Niab and like institutions are required in
large numbers with conscientious workers. Since
more and more land is turning saltish and brackish
concentration will be required to evolve.
VARIETIES TO COUNTER THE BRACKISH LAND:
TAIL PIECE:
There appears intractable spots to reach a point
of solution. In this regard lack of conviction is
so deep that years of exercise fail to reach a
decision. We don't have to ponder much for finding
glaring example of indecision. Kalabagh dam yes,
Kalabagh dam no - The hedge trading in cotton was
in vogue in Pakistan.
There probably no complaint about any weakness in
the system. It was un-Islamic and therefore rules.
Then world renowned religious ulema declared it
not un-Islamic if no manipulation is involved. It
was today certain that cotton trading in kerb will
be run either by KCA or some other organisation.
It is now heard ginners are opposing it tooth and
nail - not only that it is un-Islamic but because
it is not workable in Pakistan as is working in
America and India.
Courtesy Business Recorder |
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Pakissan.com; Advisory Point
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