Mills buying imparts firm tone to cotton market

Regular and steady buying by the domestic mills has resulted in increase in cotton prices this week. Lint prices are reported to have increased by Rs 150 to Rs 200 per maund (37.32 Kgs), particularly for the higher grades in the ready market.

Thus seed cotton (Kapas / Phutti) prices in Sindh are said to have ranged from Rs 2800 to Rs 3050 per 40 Kgs on Thursday, according to the quality. In the Punjab, seed cotton prices reportedly ranged from Rs 2900 to Rs 3250 per 40 kilogrammes.

Lint prices in Sindh said to have ranged from Rs 5700 to Rs 6300 per maund (37.32 Kgs), while in Punjab they reportedly ranged from Rs 6200 to Rs 6300 per maund in a firm market.

In Sindh, second picking of cotton is reported to have started. The current crop (August 2017/July 2018) size is presently being estimated around 12.5 million bales (155 Kgs). Daily arrivals have now picked up and are estimated to be 125,000 bales (155 Kgs) from which the mills are reported to be buying 100,000 bales daily. Arrivals of cotton are maintaining their pace which could possibly pare cotton prices later on.

In the meantime, yarn prices have been improving in the market. There are also reports that yarn is also being exported. On their part, spinners are reported to be buying cotton increasingly. However, some ginners have reported that pressure on cotton prices is now being felt since yesterday. There were also reports that the prices of better quality of cotton have increased compared to the lower grades.

In Punjab, some of the stations supplying better cottons include Rajanpur district, Dera Ghazi Khan, /Bahawalpur, Ahmadpur and the Rahimyar Khan district. Reports of stations where cotton quality has gone down include Harunabad, Bahawalnagar, Chistian, Khanewal, Lodharan, Shujabad and areas of Central Punjab. Later in the evening prices became easier.

In ready sales on Thursday, 200 bales from Khairpur district in Sindh reportedly sold at Rs 6175 to Rs 6200 per maund (37.32 Kgs), while 200 bales from Burewala sold at Rs 6175 per maund, 600 bales from Vihari and Mohammadpur Diwan sold at Rs 6150 / Rs 6175 per maund, 1000 bales from Fazilpur sold at Rs 6200 per maund, while 200 bales from Bahawalpur sold at Rs 6175 per maund in a firm market.

On the global economic and financial front, several countries like the United States, the Eurozone, Japan and Canada are faring reasonably well since the beginning of this year. However, some countries like Venezuela, Brazil, Mexico and India are facing problems in their economic growth.

In America, the bosses at the Federal Reserve continue to remain increasingly concerned at the flagging rates of inflation. Though equity markets continue to post record rises, the slow rise in price increases indicate stubbornly slack growth in inflation. Though equity markets continue to post record rises, the slow rise in price increase indicate stubbornly slack growth in inflation. It is generally expected that the central bank in the United States will increase interest rates one more time this year, but some members of the 'federal Reserve believe that a raise in interest rates should be deferred until the inflation rate touches the target of two percent. Another pending issue facing America is the Nafta talks between Donald Trump and the Canadian premier Justin Treadeau pertaining to the Bombardier - Boeing row.

In Great Britain, there is a deadlock on the Brexit Bill. The European Union's Chief negotiator Michel Bernier Laments the lack of progress to enable the U.K. and the European Union to move to the next stage of the Brexit talks. Bernier added that though there was a "new momentum" in continuing the discussions, but there still remains a deadlock of how much the British should pay when they leave the Union, which has become a hurdle in the discussions.

In the Eurozone, a "burst of activity" has been reported where by its economy is said to have ended its third quarter on a firm note, a survey revealed. The survey was reported to have been conducted by the IHS Markit composite purchasing manager's index (PMI) which indicated that private businesses grew at a faster speed than was anticipated in September, 2017. It thus followed that the European Central Bank (ECB) increased the projected economic growth rate during the current year to 2.2 percent, which constitutes the fastest growth rate in a decade.

Recently, referring to the Nafta talks, president Trump has surmised that in case of failure of talks, there could be a trade pact between America and Canada excluding Mexico. This he disclosed following a discussion with visiting Canadian premier Triudeau at the White House.

The pitfalls concerning a global economic recovery include several problems. The failed Indian crackdown of illegal cash money has become an obstacle in obtaining an early economic recovery. Another recurrent subject pertains to the inequality between the people in most countries of the world. And now the United Nations has warned of the dire consequences following the sudden rise in hunger across the globe which requires a dedicated emphasis on developing rural economies.