Mostly the ready cotton market remained essentially steady though it is said to have conceded upto Rs 200 per maund (37.32 Kgs) of lint for the higher quality in both Sindh and Punjab. Seedcotton (Kapas/Phutti) prices went down by Rs 400 to Rs 500 per 40 Kgs for the higher quality in Sindh, while in the Punjab they are said to have lost Rs 500 to Rs 600 per 40 Kilogrammes.
On Thursday seedcotton prices are said to have ranged from Rs 2,500 to Rs 2,800 per 40 Kgs in Sindh, while in the Punjab it reportedly ranged from R.2,500 to Rs 3,300 per 40 Kilogrammes. Actually, the quality of seedcotton is decreasing rapidly with the approaching close of the current season (August 2013 – July 2014). It is believed that the total cotton output this season (2013-2014) would be around 13.3 million bales (155 Kgs) ex-gin. However, the domestic mills are projected to need between 15 and 15.5 million bales during the season. Pakistani mills are anticipated to increase their capacity and produce larger amount of textile goods following the grant of the General System of Preferences Plus (GSP Plus) status by the European Union.
Exports of cotton could touch half a million bales while Pakistani mills may import between 1.5 to two million bales. Lint prices for the higher quality of cotton are said to have decreased by about Rs 200 per maund (37.32 Kgs) in both Sindh and Punjab. However, business turnover in the market was said to be low. In Sindh, 400 bales of cotton from Dharki sold at Rs 7,000 per maund. In the Punjab, 500 bales from Harunabad sold at Rs 6,900/Rs 6,950 per maund while 200 bales from Shadar Lund sold at Rs 7,200 per maund.
Lint prices in Sindh reportedly ranged lower from Rs 5,600 to Rs 7,000 per maund (37.32 Kgs), while in the Punjab they are said to have ranged from Rs 6,700 to Rs 7,100 per maund. However, it appears that the overall outlook for our domestic market should remain steady and stable. In any case, cotton prices in China, the United States and India are quite steady so presently no bearishness is deemed in our market. The cotton economy in Pakistan should proceed positively.
On the global economic and financial front, mixed data added to the muddle-headedness of the equity markets. Some believe that a sizeable correction is in the offering which could slash share values up to 10 percent whereafter a normalcy will prevail on the equity markets. Others opine that the markets are just directionless and that mostly adverse economic data will send jitters into the markets. Just on last Tuesday the United States stocks prices had rebounded due to encouraging earnings where as earlier the selloff was triggered by weaker than expected data in America. Other concerns are said to have included tepid growth in China and fears regarding declining markets. For instance industry output plunged in Brazil and only advanced slightly in 2013 and December 2013 figures were reportedly worse than expected.
The mix-up in data received from the United States remained fragmented. On the one hand, as reported by Reuters, “The US data left investors uncertain over the pace of recovery in the world’s largest economy. US private employers added 175,000 workers in January, slightly fewer than the 180,000 increase forecast by analysts.” However, data firm Morkit was reported to have said that “growth in the US services sector quickened to a four-month high level in January 2014 and hiring remained robust”.
January 2014 onwards global equity markets have mostly been trampled and fears abound regarding the overall vulnerability of business performance. To begin with, the Federal Reserve decision to continue tapering its stimulus programme to US 65 Dollars billions a month from the peak of US Dollars 85 billions had dented the economic sentiments on the emerging markets and beyond. Other troubles and shortcomings continue to hit the global economics.
Even though the European shares inched up moderately at midweek after a continuous slide for a fortnight earlier, investors remained jittery regarding any real improvement in global growth which continues to remain decidedly dicey. Other major weaknesses impeding global economic growth continue to remain the basic vulnerability of several major banks around the globe and the deteriorating unemployment situation which continues to hurt most major countries and regions of the world.
Consequently, the new year 2014 has started on a sour note which started soon after the so-called Santa Claus rally reported during the end of last year. It appears that only meaningful reorientation and a proper restructuring of the global economy on equitable lines will rehabilitate our deep rooted economic woes.