Source: CAI

November 21, 2014 (Source: Business Recorder) DR ZAFAR HASSAN

Cotton market remained weak on Thursday as both seedcotton (Kapas / Phutti) and lint prices remained under pressure. In recent days, the seedcotton prices, mostly the lower quality, incurred decrease by Rs 200 to Rs 300 per 40 kgs in Sindh, while in the Punjab they reportedly suffered a decline of about Rs 100 per 40 kilogramme. Lower grades of lint are said to have suffered a decrease of Rs 100 to Rs 200 per maund this week in both Sindh and Punjab.

Thus the price of seedcotton in Sindh is said to have ranged from Rs 1,600 to Rs 2,400 per 40 kgs, while in the Punjab the price of seedcotton reportedly obtained from Rs 2,200 to Rs 2,600 per 40 kgs, according to quality. It is estimated that seedcotton from current season (August 2014 / July 2015) equal to about 12.5 million lint equivalent bales (155 kgs) will have arrived at the ginning factories by the end of this month.

Lint prices in Sindh are said to have ranged from Rs 3,400 to Rs 4,900 per maund (37.32 kgs), according to the quality. In the Punjab, lint prices reportedly ranged from Rs 4,850 to Rs 5,050 per maund in a weak market.

According to the Pakistan Cotton Ginner's Association (PCGA), seedcotton arrivals countrywide upto the 15th of November 2014 were 10,438,073 lint equivalent bales from which the domestic mills lifted 7,764,224 bales. The exporters have purchased 273,980 bales and an unsold quantity of 2,399,869 bales remains with the ginners. The Trading Corporation of Pakistan (TCP) is reported to have purchased around 300,000 bales from the ginners till now but they have not reported to have started to lift this cotton.

Global glut of cotton is pressurising cotton prices everywhere where various schemes to improve cotton prices have been evolved as in China, India and Pakistan but the pressure on lint prices refuses to relent. Lint output in Pakistan could range from 14.5 to 15 million bales in the current season (2014 / 2015) due to higher reported yields.

In ready cotton sales on Thursday, 400 bales of low quality lint from Shahdadpur are said to have been sold at Rs 3,400 per maund (37.32 kgs) In the Punjab, 800 bales of cotton from Mianwali were reportedly sold on Thursday at Rs 5,100 per maund, 500 bales from Mohammadpur Dewan and 800 bales from Lodhran were said to have been sold at Rs 5,025 per maund, 1,000 bales from Rahimyar Khan were sold at Rs 5,025 / Rs 5,050 per maund, while 400 bales from Mianwali were sold at Rs 5,100 per maund in a weak market.

Textile mills continue to suffer due to lack of clarity regarding gas and power supply. Thus the mills continue to suffer due to confusion in the policy of gas supply as announced earlier by the government.

Death occurred last Tuesday (18 November 2014) of Mian Shahzada Alam Monnoo, a dynamic businessman with wide interests in textile, sugar, estate development, philanthropy, a patron of arts and culture who also promoted school education, building of mosques, gardens. He was also cotton merchant in the 1950's and 1960's and established the first Toyota Motor assembly plant in Pakistan.

He was 80 years old and belonged to the Chinniot Shaikh community. He was also the chairman of the All Pakistan Textile Mills Association (APTMA). He was a director in many companies including his many textile concerns of which he was the Managing Director. Mr Shahzada Alam Monnoo studied at the Wilhem School at Dera Doon, the Aitchison College and also went to the prestigious North Carolina State University where he studied textiles.

He promoted and encouraged many schools, universities and hospitals. He was also the president of the Lahore Chamber of Commerce and Industry. Mr Shahzada Alam Monnoo was also a federal minister for Commerce, Textile Industries, Privatisation and Investment during November 2007 and March 2008. The late Mr Shahzada Alam Monnoo was a very likeable and social person who always helped his friends and needy persons. May Allah Almighty bless his soul and give courage and fortitude to his family.

On the economic and financial front, sundry equity and commodity markets, besides the business community, got a shock early this week to learn that Japan has again slide into a recession. Reports informed that Japan's economy shrank unexpectedly for the second consecutive quarter throwing the world's third largest economy into a recession.

Reuters reported on Wednesday that the recession followed "a revised 7.3 percent contraction in the second quarter (of 2014) which was the biggest fall since the March 2011 earthquake and tsunami". It has also been reported that the Japanese economy has contracted during three of the last four quarters.

In France, the economy has remained stagnant since the past two years lacking any economic growth. Economic experts say that control over the French economy is slipping. Instead of boosting the strength of various companies and corporations, France is stuck with constrictive social systems and labour markets which are impeding any possible growth in the economy.

Urgently needed economic reforms are being bypassed which has resulted in the gradual growth in the national budget. Thus France, and in its turn Italy, besides the periphery of the Eurozone, are all contributing to an unmanageable and indeed declining European economy. There appears no improvement in the gradual but steady decline in the European economies.

Economic observers stated on Thursday that just like Japan the entire Eurozone faces the threat of falling into a recession. The financial information company Markit is reported to have stated that "the purchasing manager's index for the Eurozone, a broad gauge of business activity, fell to a 16-month low of 51.4 points in November (2014) from 52.1 in October (2014)". Furthermore, "Markit also found that growth in Germany, Europe's number one economy, has slowed to its weakest pace since the summer of last year, with demand stagnating".

Share prices in Asia fell for the second day following a drop in materials prices following a further slide in iron ore prices. Surging supply in raw materials and commodities with a five year low price for iron ore sent share prices on a downward trajectory.

With weak commodity prices, selling pressure mounted on mining and energy stocks. Many share prices on the Chinese bourses also suffered. Thus Hong Kong's Hang Seng Index sank for the fourth day in a row.

All the American stock index futures fell on Thursday anticipating that equities will extend losses. The concern of the investors pertains to slowing down of world economic growth. Many if not most of the world's equity price indices have fallen at the coming weekend.

Investors have become more nervous and jittery over the continuing negative prospects concerning the growth in the world economy. Likewise, uncertainty and volatility in the global growth outlook has increased sharply. (Source: Business Recorder)