Distinctly bearish sentiment on cotton market

Generally speaking the conditions on the cotton market appeared distinctly bearish on Thursday. Since the past three days, cotton prices have reportedly gone down by Rs.200 to Rs.300 per maund (37.32 Kgs) in a mostly tepid market. After a receipt of assurance of a package of reported U.S. Dollars Six billions from the Kingdom of Saudi Arabia following friendly discussions between prime minister Imran Khan, King Salman bin Abdul Aziz and crown prince Muhammad bin Salman, the Pakistan Rupee fell to 132 from an earlier Rs.140, strengthening its worth and making imports cheaper.

Seed cotton prices also went down by Rs.200 per 40 Kgs this week. Thus on Thursday the seed cotton (Kapas/Phutti) prices in Sindh are said to have extended from Rs.3600 to Rs.4100 per 40 Kgs, while in Punjab the seed cotton prices are said to have ranged fromRs.3700 to Rs.4100 per 40 kilogrammes.

Likewise, lint cotton prices are also said to have gone down by Rs.200 to Rs.300 per maund (37.32 Kgs) this week. Thus the cotton price in Sindh is said to have extended from Rs.8200 to Rs.8900 per maund (37.32 Kgs), according to the quality. In the Punjab, lint prices reportedly ranged fromRs.8400 to Rs.8800 per maund according to the quality.

Pakistan is reported to have imported about 1.8 million bales of cotton till now from America, India, Brazil and Turkey from the beginning of this season (2018/2019). It is reported that cotton prices were also mostly weak in America, China and India during this week.

In ready business on Thursday, 200 bales of cotton from Sakrand in Sindh are said to have been sold at Rs.8300 per maund (37.32 Kgs), while 200 bales from Rohri sold at Rs.8850 per maund.

In the Punjab, 1000 bales of cotton from Yazman Mandi and 1200 bales from Fort Abbas both sold at Rs.8700 per maund, according to the quality.

On the global economic and financial front, more and more analysts and assessors are joining the chorus to predict that a second and a historic Great Depression are on the anvil. Sharp falls in equity values around the world have wiped out sizeable chunks of gains which were made around the beginning of 2018. As a result, the fears of an increasing global economic slowdown are now abundantly apparent.

According to the Chairwoman of the International Monetary Fund (IMF), Christine Legarde, the global trade system is in danger of being torn apart. Legarde had earlier warned that an epic market bubble was building on the Wall Street which could bring about carnage of sizeable proportions leading towards damaging the global economy in an unprecedented manner.

With each passing day we increasingly hear a plethora of negative news concerning the global economy. It is becoming more and more frightening as we increasingly hear of what has been styled as the impending approach to a Second Great Recession.

Some of the causes being put forward for the impending global economic catastrophe include economic nationalism which is a major threat to any sustained growth in most of the economies around the world. The emergence of nationalism in conjunction with populism is a sure formula for fuelling global tensions extensively.

We may recall that it all began earlier this year when America and China started imposing tariffs and counter - tariffs on each other so that it continued unabatedly involving more and more countries increasingly.

Other reasons which are responsible for the speedily falling confidence in the global economy include the interminable and exasperating talks between the United Kingdom and European Union on the Brexit issue, Italy's economic turbulence, the slump on the world stock markets, including a loss of Dollars 5 trillions on the Asian Market this year, a slump on the American equity markets besides the fall on the European bourses, the fear of bursting of the junk bond bubble, the faltering of the economies of Italy, Venezuela, Brazil, Turkey, Greece, Guatemala, Argentina, Honduras, El Salvador, Mexico and several others.

Furthermore, untold thousands of migrants streaming in from Latin America into the United States and from North Africa into Europe seeking better living opportunities have further aggravated the economic conditions around the world. Such socio-economic adversities are leading the world into an impending catastrophe.