DR ZAFAR HASSAN

Firmness continues on cotton market

LAHORE: Over the past several weeks, mostly a steady condition prevailed on the cotton market with proclivity of lint prices to tighten due to depleting stocks because of an early close of the current season (August 2016/July 2017). Mills with deficit cotton inventories are venturing to buy whatever is left from the higher grade of cotton.

On Thursday, seed cotton (Kapas/Phutti) prices were said to have ranged from Rs. 3,300 to Rs. 3,400 per 40 kgs, while in the Punjab they are said to have extended from Rs. 3,300 to Rs. 3,700 per 40 kilogrammes. Lint prices in Sindh were reported to have extended from Rs. 6,200 to Rs. 6,900 per maund (37.32 kgs), while in the Punjab they were reported to have ranged from Rs. 6,400 to Rs. 6,950 per maund, according to the quality.

Domestic mills consumption for the current season is projected to range between 14 to 14.5 million bales (155 kgs) while the current crop in Pakistan is expected to yield about 10.8 million bales on an ex-gin basis. Imports of cotton into Pakistan could range between 3 and 3.5 million bales while the exporters could ship between 100,000 to 150,000 bales. Sowing of cotton during the forthcoming season is expected to be higher due to higher prices received by the growers during the outgoing season (2016/2017).

The Pakistan Cotton Ginners Association (PCGA) has issued its seed cotton arrivals report till the 15th of February 2017. Total arrivals have been reported at 10,685,254 bales, while the domestic mills are reported to have picked up 9,721,932 bales during the current season (August 2016/July 2017). The ginners are still said to be holding an unsold stock of 760,966 bales, while the exporters are said to have lifted 202,356 bales.

Yarn sales are said to be on moderate scale and are moving slowly. As mentioned earlier, big mills are not buying much as they have mostly covered earlier, even through imports, but the smaller mills are more active to replenish their inventories.

Correction: Please refer to the Cotton Analysis published on 17 February, 2017. Due to an oversight, it was wrongly stated that Pakistani exporters may ship between 1.5 to two million bales of cotton during this season (2016/2017). Actually, the shipment projections for cotton exports from Pakistan during the current season are likely to range from 150,000 to about 200,000 bales. The error is regretted.

On the global economic and financial front, the bewildered populace of this planet seeks the same growing economic growth and harmony it has seen for more than the past half a century. Gradually, we left the Korean, the Vietnamese wars, and the Soviet Union’s incursion into Afghanistan in the 1980’s behind us hoping for a newly, nurtured politico-economic system that would include a free and more global programme for economic trade and participation.

However, with the recently elected Donald Trump as the president of the United States since January 20, 2017, the old economic order running since the past several decades is being modified. President Trump believes that America has been short-changed in the erstwhile global economic system whereby many countries, including China, Europe, Mexico, Brazil, India, Japan and the Far East have gained undue advantage over America by imposing unfair taxation on imports from America and keeping the value of their currencies at a low level.

However, the former Secretary of State Madelin Albright has stated that diversity in the people who migrated to the United States made America great. She added that presently there is no consistency in the American foreign policy which is harming the country. Albright added that we are presently living in very difficult and complicated times. She called for inculcating a rational decision making programme as no solid achievement can be attained by going solo.

Several leaders in Europe such as Professor Sergey Karaganov, a Russian political scientist has criticized President Donald Trump by charging that his style and substance is elusive. Moreover, Professor Karaganov fears that the United States has become a divided country and that the European liberal order is disintegrating which could lead to ultimate collapse.

Another routine feature in Washington and indeed also in the rest of America and Europe, are the regular protests which are taking place against President Trump. However, it is noteworthy that despite the continuing protests against President Trump, most equity markets in America and elsewhere have touched record high levels.

Furthermore, the internecine rivalry between America and its European siblings like Germany is taking a serious form. For instance, Germany has warned the United States to desist from tinkering with European Union cohesion. On the global front, these portents listed above can conceivably revive the Cold War again. It is also feared that several countries around the world are marching towards fascism again. Another fear to global peace and prosperity is the growing decline in the ratings of President Donald Trump. In this connection, the ruckus between President Trump and the media is frightening, not only for America but for the entire world. Above all, the reported infighting within the Republican Party is very unfortunate.