20000306

Niab registers steep rise on cotton market

SHAFI AHMAD SYED

KARACHI: The short-staple Niab, much in demand by exporters, rose sharply by Rs 115 to Rs 2,081.25 during the week ended on March 4, 2000.

The K-68 rose by Rs 28.75 to Rs 2,225.00 and MNH 93 was up by some amount to Rs 2,263.75, with sales tax.

WORLD SCENARIO

Cotton futures on New York Cotton Exchange moved both ways, though bulls dominated, with nearly three cents gain. The view that all was not well on the cotton front was stablished beyond doubt.

The week opened on bullish note. Traders thought it might have come as a correction. May settled higher by 0.71 cent to 59.59 cents a pound. The intra-day low was at 58.30. Spot March climbed to 0.70 to 57.58 cents a pound. Most traders generally set on the sidelines to wait for release of the weekly NYCE spec/hedge report.

Analysts were of the opinion that funds will be not long by around 45-46 percent, market was also anxious whether West Texas would get ample rain forecast by most meteorologist before spring sowing.

The closing session on Friday saw minor gains due to option-related buying as the market continued to consolidate after sharp mid-week rally. May contract was up 0.38 to settle at 61.06 cents a pound in the trading range of 61.20 Ñ 60.42 cents. Spot March was up 0.40 to 59.50 cents. New crop, December, gained 0.18 to 62.13 cents a pound. Distant months ranged from 0.34 Ñ 0.10 cent steadier at the close.

CONFUSION CLEARED

Minfal's Rashid Mahmood Ansari in a meeting in Islamabad explained that the CE in his statement in Multan had meant to procurement lint cotton. Thus the confusion which might have been created in the minds of people concerned with cotton trade by CE's statement was cleared.

But, now people have started asking whether growers would be satisfied.

VOICE GETTING LOUDER

The manufacturers and exporters of value-added goods Ñ the bedwear association and Council of Textile Association (CTA) Ñ have questioned the unbridled export of yarn. They demanded that the government should ensure availability of quality yarn at reasonably cheap rates. But they always showed restlessness.

They have demanded check on exports of yarn. Particularly, the Pakistan Hosiery Manufacturers Association (PHMA) has insisted on complete ban on cotton yarn exports.

In the presence of both bedwear and readymade garments manufacturers, on March 3, Mohammed Shafi, acting Chairman of PHMA said that "if a total ban was not possible, at least ten percent export duty be imposed to save the local value-added industry from total collapse. He alleged that spinners had mixed lower grade cotton, and, in some case, polypropylene. The hurdle was apparent and the finished fabrics could not be dyed properly and would cause hurdles in export of value-added products.

FREE TRADE POLICY

Certain interests continued to raise voice against free trade policy.

The conviction on the part of government is deep-rooted. It is a matter of time Ñ around a fortnight when cotton policy is expected. Dr. Zakir regetted import of two million bales in the face of bumper crop locally.

Aptma on March 5, said that any deviation from free trade policy would hinder the marketing of cotton crop. It reminded that along with others, growers wanted international prices, from which the growers are backing out.

TAIL PIECE: Last week, brokers community was apparently up set. They were of the view that government's move to lift entire cotton from the market, would make brokers jobless.

It is felt that just as the confusion regarding phutti or lint cotton purchase by the government has been removed, it is imperative that brokers should also be consoldated by showing them a way by which they would not be rendered jobless.