950811

Cotton prices take

upward course

SHAFI AHMAD SYED

KARACHI: Cotton prices took the upward course, during the week under review after having received a series of setbacks during the previous week. pressure built-up on the new crop Niab which rose by Rs. 75.

The two current varieties came under the double thrust of new crop Niab's stepped up demand and Cotton Export Corporation sale of CIS cotton and sales by some commercial importers. Since the ginners, are not releasing their montly report it is well nigh impossible to ascertain the quantity of the current crop stil buying in their hands. But market sources estimate that more or less 50,000 bales remains with the gainners which they would like to dispose of as early as possible.

Anyway, a price revision was effected on Niab, which turned dearer by Rs. 75 to close at Rs. 1925: it had begun its journey at Rs. 1850. The K-68 was not revised at all to remain unchanged at Rs. 2075 and MNH- 93 held firm at Rs. 2090.

Phutti prices have also yielded significantly - ruling around Rs. 850/860 some weeks back, they now ruled around Rs. 719/730.

Movement in world cotton prices was restricted in a narrow range, mostly due to local selling and weather conditions. Early in the week New York market cotton futures were quoted as October at 74.55 cents a pound, December at 73.43 cents and March at 72.20 cents a pound. The prices towards the closing of the week in Pakistan (Thursday) were October at 73.25 cents a pound, December at 71.56 cents and March at 72.65 cents a pound.

The weather has not been very unkind, despite news of some damage and mild attack by pests and insects. In lower Sindh, where crop has matured and, in fact, has been brought into markt, a total of some 27,000 bales have been damaged from the first monsoon spell. That was the short period when cotton growers and traders had become apprehensive. After that and till date despite media report of high floods in some areas the cotton belt has been spared.

Punjab has also been safe where the crop has reached the flowering stage. All these had led to a series of setbacks in cotton prices, which lost Rs. 600 in a few day's time. Only last week, prices - Niab's prices - started gaining ground because of slightly stepped up buying, said to be due to government's firm determination to approach Japan and even to fight back in the World Trade Organisation (WTO) at Geneva.

Japan has imposed anti-dumping on exports of Pakistani yarn effective last August 4. It will have an adverse effect on our yarn exports and in the ultimate analysis on our economy. The government had been requested time and again to prevail upon Japan and stall the likely decision. But government action probably did not come in time and the result was that in inevitable happened. Now it appears next to impossible to make Japan to revoke its decision. A Japanese garment experts who was here in Pakistan when the damaging move came, expressed dout if the decision could be changed. The latest is that the Commerce Minister is keen to take the issue to the World Trade Organization. May God help us!

The Taiwanence move is at bay at the moment. Similar moves are likely to be made by Korea and Turkey. The Cotton Export Corporation is also in the news for their cotton sales to the 'needy' spinners. The previous lot of 50,000 bales were disposed of - in a way under protest by the spinners. The price of the cotton on sale at Rs. 2350 by the CEC was considered too high by the buyers. The market rate ruling these days was Rs. 2000 to Rs. 2100 per maund. It appears that the CEC considered spinners' plea favourably and later reduced the price by 10 percent. It was not clear but market sources were hopeful that this concession given on the sale of the remaining 35,000 bales of cotton will also be extended to the lot 50,000 bales earlier sold by the CEC. The reaction of the spinners to this offer by the CEC was not available. But it will make now little effect on the buying as Japanese decision has thoroughly paralysed the spinners. However, the latest CEC move may influence the lint prices, market sources said.

Meanwhile, last week also saw some more bales of cotton exported to a couple of destinations including Chittagong. According to DMR 1300 bales were shipped to Chittagong, Dubai and Constanza. The private sector exporters had registered 2,84,173 bales with the EPB. Now total number of bales still remain to be exported in 62,387 bales. Imports during July 1994 to August 1995 were 7,65,712 bales.

TAIL PIECE: The option to export yarn by the new mills (not penalised for dumping) is heartening. It means that mills with clear record may continue their exports to Japan. But Apparel Manafacturers Exporters Welfare Forum appears to have not welcomed the offer to new mills. The 'forum' urged upon the government to check exports of yarn by textile mills penalised by Japan and Taiwan for dumping under the name of those mills which have been exempted. It apprehended that such practice by the mills would create_ more problems in future because if these countries found out they will impose further penalties on Pakistan. It alleged that value-added textile sector had been pointing out that spinners were exporting cotton at prices lower then prevailing domestic prices. It said penal action was an endorsement of its claim."