20000313

Superior varieties

cotton spot rates cross

Rs 2300 mark

SHAFI AHMAD SYED

KARACHI: Spot rates of two superior types of cotton crossed Rs 2,300 per maund (with sales tax) during the week ended on March 11, 2000. External elements were more in play for the hike, rather the many local factor.

The Niab rose modestly by Rs 28.25 to Rs 2110. The Sindh superior type K-68 rose by Rs 86.25 to Rs 2311.25 and MNH 93 closed account at Rs 2350, with week's gain at Rs 86.25, all including sales tax.

WORLD SCENARIO

There was hardly any respite in May futures on New York cotton exchange which rose by 2.28 cents to 63.60 cents a pound at the close. Locals were the buyers and traders were the sellers, sources said. July cotton settled at 64.80 cents a pound and new December was up 0.33 to 62.73 cents. Analysts held that the market was unable to sell despite the massive net long position accumulated by speculative funds. Trade was focusing on USDA planting intention report by March end. However, USDA production data and traders said there was nothing to react. USDA left cotton ending stocks unchanged at 4.4 million (480 lbs) bales and raised its forecast for US cotton exports a touch to 6.5 million bales from 6.4 million earlier. Rain had also weighed. US 2000 sowings were raised to 15.7 million acres against earlier 15.4 million acres. However May closed up 0.59 cent at 63.30 cents a pound near top of its 63.75 Ñ 62.60 range. July gained 0.69 to 64.80 cents and new crop inched up to 0.03 cent to 62.73 cents.

WARNING

Every year growers are warned against early sowing. But growers hardly heed it. Some market sources on Saturday that not much care is taken in ploughing and preparing the fields. In the aftermath of CLCV attack the left-over stumps are not entirely rooted out. Thus carl leaf virus becomes active and plays havoc with the crop.

"LINK PRICE"

The term 'link price' for cotton has bewildered the trade circles. Market was abuzz throughout the week what ultimately link price proposal would yield. The first perception marketmen said, was that the government might have meant to link local price with international rates. For the last couple of years this has already been in practice but not without ragging by one or the other interest. Another perception gaining currency among marketmen was that phutti price mights be linked to lint price. This would indeed need some exercise, which may fail. Anyway, unless things emerge clearer a wait and see stance is required.

BAN OR DUTY

Leaders of value-added sectors have been demanding that yarn export be banned as it is causing at least two-fold damage to local interests. They have been claiming that one kg of yarn export brings $2.13, but garments and other value-added goods bring back $7 for the same weight. Besides this, raw material cheaply supplied (as value-added sector also claim that yarn is available at higher prices locally compared with sold abroad) takes away the edge Pakistan exporters need.

However, the well-organised spinners have not been taking it lying and have urge the government not to listen to the value-added sectors. Even on Saturday, Abid Farooq, acting convener, Aptma told newsmen that the government should not be influenced by what he said misleading advertisement and should act according to their dictates of banning altogether or at least impose ten percent duty on yarn exports.

TAIL PIECE: Aptma members of the NWFP are contemplating to form their own association Ñ Frontier Textile Mills Association (FTMA) Ñ after March 14. A press conference by FPCCI managing committee member Javed Aziz declared that they would not accept the proposed amendment depriving NWFP of Aptma presidentship for six years. It has not come to notice whether some patch-up attempt has been made. Nor, was it explained why the amendment was required.