20000403

All concerned pinning hopes on cotton policy

SHAFI AHMAD SYED

KARACHI: Cotton policy, expected in a couple of days, is likely to offer comprehensive solution to all interests in trade. These views were expressed by knowledgeable circles on April 1, 2000.

In the meantime, the attitude of wait and see remained in hallmark of market players which hit the prices after weeks of uninterrupted surge. Thus, Niab, which had shown rising trend for some weeks, was down by Rs 115 to Rs 2138.75. K-68 also lost Rs 115 to Rs 2311.25 and MNH-93 conceded likewise Rs 115 to Rs 2350, with sales tax.

WORLD SCENARIO

Rains in major cotton growing areas of the US, such as Texas and Delta, and a wait for the passage by House certain facilities made futures on New York Cotton Exchange fall by around 3 cents. The weekend experienced resurgence, but the undertone remained unpredictable.

Opening session was in the plus/minus column with players sidelining ahead of the United States Department of Agriculture planting intention report. Key May contract slipped 0.06 cent to finish at 59.15 cents moving in the range of 59.60 to '58.95' cents a pound.

New crop December was unchanged at 61.30 in the trading range of '61.65' to '61.25' cents a pound. However, planting report and spec/hedge report had minimal effect on the trading.

The picture towards the close was firmer due to speculative fund and trade buying and the release of a friendly USDA prospective planting intention report.

May contract climbed by 0.57 cent to 58.14 cents a pound ranging from 58.90 to 57.72 cents a pound. July contract rose 0.77 cent to 60.01 cents and new crop December gained 0.65 cent to 61.01 cents a pound.

COTTON POLICY

May 1, is the officially recommended time for cotton sowing. And, growers who follow their own time for sowing, desire the policy should come soon so that they can determine the land size to be used, and the quantities of seed, fertilizer etc. Naturally, comprehensive cotton policy is a good guide not only for the growers but other player also who calculate their own requirements and set a strategy.

The announcement of cotton policy for 2000-2001 has been twice postponed due to Clinton's visit and the Chief Executive's visit to some half a dozen SE Asian countries.

It was not known whether the reported differences between agriculture minister and commerce minister have been straightened out. The complete understanding between the two is essential for a comprehensively acceptable policy.

However, a policy framed by keeping in view all cotton people's interests and, above all, the nation's interests, would be welcomed.

TCP LOOKS BACK

TCP's latest tenders were priced much below its expectations due to falling international cotton rates. Under these circumstances the TCP could only earn through cotton exports at break-even level. This is upsetting TCP and is causing embarrassment for the government because TCP was brought into play for exports and price stabilisation. Now in the local markets cotton prices have gone up around Rs 2000 per maund. Thus, the prices have attracted the spinners to request the government to instruct the TCP to sell the remaining cotton with the Corporation to textile millers. The government or the TCP has, in whispers, indicated that it may oblige the local cotton seekers, by selling its cottonÊto them.

YARN TRADE

The value-added sectors have been urging the government that yarn export should be restricted, so that fabrics and ready-made garments may remain competitive in the foreign markets. They say that one kg of yarn exported earns for Pakistan only two dollars, while made-ups earn more or less seven to eight dollars.

The spinners are trapped in a similar web. The cotton, TCP is supplying to foreigners according to yarn makers, will hurt them unless TCP stops shipment and sells cotton to local buyers.

TAIL PIECE: The government has announced a programme to grow more cotton. Under the programme, the growers will be trained at district level to boost the productivity. Other parts of the programmes include supplying good seed, unadulterated fertilizer etc. Whether cotton growers take the government offer seriously, only future would tell. In the meanwhile all relevant people should hold their breath with eyes fixed on the future.