|
Analysis: Ginners fear TCP selling
would push down cotton prices
SHAFI AHMAD SYED
KARACHI : The ginners harboured fear that TCP would soon be
selling cotton to local bidders triggering price downturn.
But authorities were probably reluctant to ask TCP to sell
and then ready to buy for stability in price. The spot rate
was quoted at RS 2175 without upcountry expenses.
WORLD SCENARIO:
Rising tempo in cotton futures was evident on the NYCE as
speculative buying and switch trade helped, though trade
expected downturn in prices shortly. The March contract
opened at 44.95 and May at 46.19 cents a pound. The first
session saw futures higher on speculative fund buying
although the focus will be on switch trade as players
liquidate position in spot March before delivery. Analysts
said that robust level of world.
Cotton demand should busy fibre contracts and give the
market ammunition to make a run toward 50 cents to 51 cents
region. On Tuesday futures settled at a three week high on
speculative buying and switch trade, but contracts appeared
to be getting a bit top heavy and the surge could slow down
soon cotton expert said though the buying which had spurred
a rally in fibre contracts might run out soon and players
could square their position before holiday next week.
The trading on third day saw future down with small
inactivity dominated by heavy switch business as players
scrambled to got out of position in the spot March contract.
Analysts said the ability of the market to lay near its
current highs seems to indicate that a further advance may
be in store for cotton. The trade was waiting for USDA
report on export sales. On Thursday session saw futures
lower as heavy switch over took place as players scampered
out of spot contract with only one session left before it
went into delivery next week. Monday will be a holiday (US
precedent's day), traders said.
They said USDA cotton sales hit 263,700 RBs, slightly above
the trade belief. Shipments of previously booked orders
stood at 308,600 RBs. However, market hardly reacted to the
USDA export sales , traders said, because players did not
want to take delivery of cotton when first notice day
started on February 22, 2005. Friday's session settled firm
on late trade and speculative short-covering right before
market goes into delivery next.
Tuesday, Monday being holiday. A report said that if
sufficient export interest surfaced futures might yet push
up to mid January 48.25 cents basis May. The March contract
opened at 45.98 and May at 46.66 cents.
LOCAL TRADING: That TCP will be selling cotton to local
consumers had paralysing effect on the sellers but it proved
to be nearly wrong for the time being and prices maintained
firm trend. The spot rate was unchanged at Rs 2150 without
upcountry expenses. The cotton prices stayed above spot rate
while seed cotton also firmed owing to low arrivals. On the
first trading day despite rumours , ginners were in driving
seat and were keeping asking prices higher than the spot
rate.
The fortnightly statement from PCGA was expected any day. On
Tuesday nearly 5000 bales of cotton changed hands. The
spinners and millers were reluctant to go all out in the
face of arrival report. Spot rate was maintained at Rs 2150.
The TCP had not yet started selling to local bidders. Cotton
prices ruled at Rs 2250 and Rs 2300. On Wednesday trading
remained low as prices were expected to prove higher.
The ginners made the buyers run away to sidelines by raising
asking prices to Rs 2300 and above. Spot rate was unchanted
at Rs 2150 and rates in ready were between RS 2250 and RS
2275 both in Sindh and Punjab. Around 4000 bales were stated
to have changed hands. The trading was low on Thursday, as
expected on the eve of Ashura-e-Muharram holidays on
Saturday and the following days. But the sellers raised the
cotton spot rate by Rs 25 to Rs 2175 owing perhaps to the
perception that fortnightly statement of the PCGA show light
seed cotton supply position.
The ready cotton rate ruled between Rs 2250 and Rs 2275
while phutti price held to overnight levels at Rs 900 and Rs
1050 in both Sindh and Punjab. The spot rate was raised on
Thursday said to be due tight supply, though buyers had
turned quite calculative and were lifting quality lots.
However, trading was also depressed owing to Muharram
holidays. The PCGA released arrival report.
The cotton consumers will open up or get contracted will
depend how they read the fortnightly report. ON Friday
brokers said deals were noted but price quotation was not
made available. The spot rate however was quoted up Rs 25 to
Rs 2.075..
TEXTILE BODIES MERGER: The preparations for mergers
of like textile exporters bodies has been delayed by a
couple of years. That WTO will sweep the world trade from
the year 2005, was quite pronounced. Its challenges and
opportunities too were not unknown. But, it took one year to
think on such healthy lines but "ego" came in the way.
The Pakistani exporters were being offered insight by the
eager Chinese and Indian textile teams to join hands to
chalk out plans to keep prices at a level to heat
competition. However, the fear that division may lead to Pak
exporters' failure to make most of the opportunities
prompted them to sunk their differences and merge. It seems
that APTMA perhaps stayed away from the "Clusters".
The rest of the clusters under six bodies have talked about
merger to make move successful by sacrificing their
personnel ego to get the highest "Slot" in the merged
structure. A half hearted move, not of merge, was tried
couple of year back perhaps at FPCCI initiative to make
exporters of different bodies, sit together and sink their
differences on issues thus protecting their interests. But
it was perhaps bedwear exporters members who ran away from
the meeting complaining their interest was certainly safe
despite "pious" feelings.
As a matter of fact there should be some sound thinking
followed by a firm decision on highest "slot". The decision
should base not on how big the organisation the exporters
come from lend actually how dedicated they are, how
knowledgeable they are and how much he/they would deliver.
The indication has been that highest slot should be on
rotation basis. The particular exporter massing the bodies
affairs with perfect precision and efficiency should be
given to lead and lead unless he/they are considered by
majority that he/they have outlived utility. The idea has
downed somewhat but is welcome and should be given a strong
and concrete shape at the earliest.
EVEN PLAY GROUND: The executive committee of the PCGA
have demanded that the authorities saved them from possible
huge loss as 105 million bales were then lying unsold. If
spinners and textile millers are given green signal, as was
being hinted, the ginners expected a loss of Rs 2 billion.
But if TCP fails to sell cotton abroad, it will also lose
considerably huge amount. The spinners aim at blocking
export of cotton to their competitors abroad so that they
are spared of losses.
Cotton trade and textile millers probably remember that
spinners had made a bid to block TCP induction into cotton
business. The growers then had apprehended and rightly so
that spinners manipulation would push them into hot waters.
The exports close to cotton and textile trade frankly
question whether government should plan any role in
ameliorating contesting parties problems or observes
silence.
They were vocal in expressing that such protests made them
sick as they saw authorities signal TCP go ahead with the
sales to local cotton consumers. They pointed out that
authorities inducted TCP to lighten the burden of the
vulnerable made ginneries. As a mater of fact such rituals
have taken firm root which need to be uprooted.
They were emphatic on these words as it has been proved
futile always. Waste of energy and money however small
should be saved. If business ethics plus are made rules in
Pakistan order of the day such frivolously childish ideas
could be eliminated. A lots of heart burning, fax and paper
expense could be saved. Both major players have clash of
interest at one time or the other. The situation demands
they should find out meeting point as seen in the wider
contest they both lose at one time and gain on the other.
TEXTILE MACHINERY: It was so happy to learn that
latest textile machinery has been inducted and would go
along way to boast exports. Thus far only huge investment
was mentioned. However, it was still vague whether they were
new also, people close to cotton and textile trade observed.
They, however, further observed there would be textile
sector with machinery produced by Pakistan in Pakistan?
Had the machinery been made in Pakistan, they said at the
first instance the products would be cost effective and
competitive. Besides it would save hefty and much needed
foreign exchange. Cotton sales irk spinners and textile
millers who want cotton surplus to be barred from exporting
until consumers had collected their entire needs. The worry
they used to harbour was that had Pak cotton exported to any
country and products exported would have made Pak products
uncompetitive.
The growers won't forget selling cotton at throwaway prices
a couple of years ago. They questioned who were the
beneficiaries? Growers shouted in disgust then to switch
over to other more paying crops. But their leaders in the
meantime changed the pattern of asking pricing - strictly at
par or higher them world rates. Latest textile machinery is
being projected with a sense of pride every alternate day.
But should not be proper to inform people nature, build and
worth of the machinery. Are the machinery imported and
installed only to spin or used also for production of fabric
and other value - added goods? However, speaking at curtain
raiser of textile Asia 2005 exhibition and conference,
Senate Chairman Muhammedmian Soomro lauded machinery with
provision of necessary infrastructure which according to him
will boost exports. The wonders are awaited for participants
of the Textile Asia 2005 scheduled on March 19-21 next at
Expo Centre, Karachi.
TAIL PIECE: CBR is on the right track in supporting
textile exports potential to the maximum. The latest is
facility of continuous chain invoices under Sales Tax Act
1990. The facility was available earlier to
manufacturer/exporters of textile products. Under this
scheme the commercial exporters would be eligible to claim
ST refund against invoices obtained on going through various
processes lake weaving, dying and printing. However now the
refund claim will be valid after matching on invoices used
for claming refund. The facility will improve chances of
more exports by the commercial exporters thus taking full
advantage of the avenues available in the WTO system.
Courtesy: Business Recorder
|
Pakissan.com;
|
