960417

Lacklustre conditions

in lint market

DR. ZAFAR HASSAN

LAHORE: Due to the protest strike called by the Mohajir Qaumi Movement (MQM) in Karachi on Thursday to register their "resentment against the passage of the Sindh local government (amendment) bills in Assembly" and subsequent weekend holidays to be followed by almost a week of celebration and festivities on account of the Eid-ul-Azha (on the 29th of this month), the trading activity in the ready cotton market is likely to dwindle day-by-day. Some ginners would wish to offload their cotton inventories, but the mills are only reluctant buyers, as the mills will also close for several days between now and the end of this month. Truck availability to haul the cotton between the ginning factories and the textile mills scattered throughout Pakistan will be reduced as the truck drivers would soon be leaving to their homes in the Northern Frontier and the Punjab provinces to be with their kith and kin before the advent of the forthcoming Eid-ul-Azha.

Thus the reduced economic activity for the next fortnight or so in Pakistan could contain the lint prices from moving any higher, and could conceivably suffer a technical setback, however momentarily. One broker from Karachi mentioned the anxiety of at least a few of the cotton ginners to sell off their leftover stocks and close the season and lock up their ginning factories. Uncertainties regarding sales or other forms of new indirect taxes on manufacturing and consumption anticipated in the forthcoming federal budget due in early June, 1996 is also having a dampening affect on business and industry.

There is news in the market that the Cotton Export Corporation (CEC) is proposing to dispose 7,000 bales of its remaining stocks of CIS cotton which it imported from Turkmenistan last year. Probably, the CEC is still in the process of evolving some formula under which it would distribute the said 7,000 bales (of 480 lbs each) to the various spinning mills in Pakistan. Moreover, the CEC is also reported to be actively making arrangements to import the balance of 6,000 bales it has yet to recover from its last year's transaction with the authorities in Turkmenistan, but the authorities in Turkmenistan are reported to be asking for full payment in cash before the cotton is released for removal to Pakistan.

The tone of the domestic cotton is variously being described as steady to firm, but the mills also lack the energy or stamina to acquire more stocks of raw cotton while the price of cotton yarns is not fully keeping pace with the price of its primary raw material, viz cotton.

In the ready cotton transactions on Wednesday, 200 bales from Tharo Shah are said to have sold at Rs 2275 per maund. Though no sale was reported from the Khairpur District, the ginners from Sitharja and Mehrabpur were said to be sellers from Rs 2325 to Rs 2350 per maund. No business was reported till Wednesday afternoon from upper Sindh (K-68 variety), so the price in that area could be deduced as Rs 2400 per maund or even less.

In the dull business environment now apparent due to the several closures ahead, Punjab rates of good quality cotton could deemed to range from Rs 2350 to Rs 2400 per maund, but several transactions took place at even lower values. About 385 bales from Dunyapur near Mailsi were said to have sold at Rs 2325 per maund on Wednesday. However, 300 bales from Karor Pucca reportedly sold at Rs 2340 per maund. On the other hand, 1500 bales cotton from Harunabad are said to have sold at Rs 2385 per maund.

The spot rates of the Karachi Cotton Association (KCA) on Wednesday were Rs 2250 per maund for Niab-78, Rs 2420 for K-68 and Rs 2470 for MNH-93, which are the peak official rates for this season. The actual registrations for cotton export with the Export Promotion Bureau (EPB) are now 2,319,289 bales upto the 14th of April, 1996, and actual shipments of the 1995-96 cotton crop from Pakistan upto the 15th of April, 1996 are 1,740,380 bales.