By admin       2016-08-12

Domestic cotton prices declined notably this week in line with retreating global values of the fibre. Within the past few days, New York ICE cotton futures fell sharply following reports of better weather forecast in Texas. Improved weather conditions in India / Gujarat also pulled down cotton prices. With the extension in cotton reserve selling period announced by China until the end of September, 2016, the Chinese market also became relatively easier.As a consequence of weakening lint prices abroad, local seed cotton (kapas / phutti) prices fell by Rs 200 to Rs 250 per 40 kgs this week. Similarly, domestic lint prices also fell between Rs 200 to Rs 400 per maund (37.32 kgs), according to quality, during the past three or four days.Thus on Thursday the seed cotton (kapas / phutti) prices in Sindh are said to have ranged lower from Rs 2,900 to Rs 3,250 per 40 kgs, while in the Punjab they are also said to have extended from Rs 2,900 to Rs 3,250 per 40 kgs, according to the quality. Similarly, lint prices in Sindh were also lower and are said to have ranged from Rs 6,500 to Rs 6,800 per maund (37.32 kgs), while in the Punjab they are said to have extended from Rs 6,750 to Rs 6,950 per maund in a weak market.The Cotton Commissioner in the Ministry of Textiles Khalid Abdullah is reported to have said that recent rains would be beneficial for the current crop (2016/2017) but it could have a negative impact on its output if rains continue for a longer period which could inflict various diseases on the crop.Cotton output during the current season (2016/2017) is presently being estimated around 12 million bales (155 kgs) provided extended rains do not damage the crop. Khalid Abdullah added that cotton sowing in Pakistan has registered a notable decline of 15 percent in the current season as compared to the pervious year. Thus the current crop has been cultivated on 2.86 million hectares against the proposed target of 2.9 million hectares during 2016/2017. It is estimated that domestic mills will need between 14.5 and 15 million bales of cotton (153 kgs) so that the shortfall in cotton supply will be imported.Since the beginning of the current season, nearly 500,000 bales of cotton have been pressed till now. In the textile sector, some decline has been reported in the prices of cotton yarn following the decrease in cotton prices. Presently, it appears that cotton prices could go down to some extent while yarn movement may remain slow for the time being.On the global economic and financial front, it was believed at the beginning of the current calendar year (2016) that all the monetary and fiscal problems which erupted during the Great Recession of 2008-2009 would somehow vanish and normalcy would be gradually restored. However, the current economic condition signals otherwise.Take for instance the infusion of various stimuli to prop up the economies in various countries and regions around the world which have mostly proved ineffective. According to the columnist Eshe Nelson, the Central Banks around the world are now spending Dollars 200 billions on emerging economic stimulus programmes every month by pumping this money into their respective economies by buying bonds. However, such massive buying of bonds has yielded no tangible results. Such extra ordinary official support has hitherto yielded no positive results in bolstering the sinking global economies.At present, the inputs of Quantitative Easing (QE) by the sundry Central Banks appears to be an endless and futile exercise. Reports added that the Bank of Japan and the European Central Bank are the foremost perpetuators of the bond buying scheme while the Bank of England is now said to be proposing to further increase its endeavours to buy more bonds from the public. Some economic observers say that the Central Banks are only biding for time and that the global economic downturn is continuing precariously.In another serious economic development, the British Broadcasting Corporation (BBC) has reported that Chinese exports have posted a further decline in July 2016 which has increased concerns pertaining to the global economic outlook. Chinese exports are reported to have fallen by 4.4 percent compared to the previous year, which has disappointed the economic analysts who were expecting better results. This development negates the scope of global demand for goods.A recent news just reported by the CNBC has informed that the global economic situation and outlook have dipped to a three-year low level as determined in the World Economic Survey of various experts as prepared by the prestigious IFO Institute which is based in Munich. IFO President Clemens Fuest has been quoted as saying that sentiment in the world economy is subdued.As a consequence of continuing slide predicted for the global economy during 2017 and possibly later on, the current growing stockpiles of crude oil are likely to keep oil prices lower. It has been reported that Brent crude oil prices have fallen from a peak level of dollars 115 per barrel in June 2014 to nearly 45 dollars at present. Accordingly, the International Energy Agency foresees the demand for oil to grow at a lower pace than this year. Such a scenario is bound to hold back economic growth in nearly two dozen oil producing countries around the globe.It may be observed that governments, bankers, businessmen and economic thinkers have entered unchartered waters with equity values mostly floating high on negative interest rates but no clear direction has been provided or evolved to control the rattling global economy.

Download App

# #

Member Login