Overhang of global cotton surpluses have diminished appetite for cotton to a low level.

Mostly China remains an occasional buyer while other markets are importing sparingly.

Reported cancellations of large quantities of global contracts are also providing downward pressure on cotton prices.

Moreover, more pressure on cotton prices cannot be ruled out.

In Pakistan, basic cotton products from lower to medium counts of yarns and coarse and heavy fabrics such as denims, tents, towels and tarpaulins are said to be doing alright.

Producers of high counts of yarns and higher end textile products are reporting decreased demands.

Therefore manufacturers of coarser counts of yarns are said to be receiving good enquiry.

Under the circumstances, enquiries for imported origins of cotton are minimal.

Seedcotton (Kapas/Phutti) prices declined by an estimated Rs 200 to Rs 300 per 40 Kgs this week.

Thus in Sindh the seedcotton prices reportedly ranged from Rs 1500 to Rs 2200 per 40 Kgs, while in the Punjab they are said to have ranged from Rs 1600 to Rs 2300 per 40 Kilogrammes according to the quality.

Lint prices in Sindh reportedly ranged from Rs 3,400 to Rs 4,800 per maund (37.32 Kgs) on Thursday, while in the Punjab they are also said to have prevailed lower between Rs 4,500 to Rs 4,900 per maund as per quality.

Higher arrivals of seedcotton are also said to be depressing the domestic cotton prices against which the growers and ginners are pleading to the government since the past several weeks to activate the Trading Corporation of Pakistan (TCP) to lift the cotton.

However, traders in the Karachi Cotton Association (KCA) and the mills are reportedly favouring free trade of cotton.

A considerable quantity of cotton is also of a higher micronaire value, but such coarse cotton is said to be useable for coarser counts of yarn and open end spinning.

In actual sales of cotton reported till Thursday evening, 1600 bales from Ahmadpur East sold at Rs 4,600 to Rs 4,800 per maund (37.32 Kgs), 400 bales from Khanewal sold at Rs 4,700 per maund, 1,000 bales from Bahawalpur sold at Rs 4,700/Rs 4,800 per maund, and 2,000 bales each from Ahmadpur East and Sadiqabad sold at Rs 4,800 to Rs 4,900 per maund.

The general tone of the market was very weak.

The general cotton production estimate for the current season (August 2011-July 2012) was projected from 13.5 million to 14 million domestic size bales on an ex-gin basis.

Mills consumption was also being estimated between 13.5 and 14 million bales.

Exports were being projected between half a million to one million bales, while imports could stretch from one million to 1.5 million bales.

Holiday mood has already started in several parts of the world in anticipation of the incoming Christmas and the New Year.

On the global economic and financial front, a serious situation has arisen where both political disarray and economic downturn are taking a heavy toll on all the sundry equity and commodity markets around the world.

Political wrangling within the European Community, particularly the dangerous division between the Eurozone countries and the United Kingdom regarding financial control to be exercised by the central monetary authority over different member countries has depressed the euro deeply against the United States dollar and sundry other currencies.

Prime Minister David Cameron could not support the Eurozone countries to surrender some of their authority in managing the overall European financial affairs as UK would thus lose its pre-eminence as a financial hub where monetary markets and services industry would impact the City in London very adversely.

Besides primarily selling retail goods and services and shopping material, providing global banking services remain the bread and butter activity for Great Britain.

In fear of the Eurozone's proposal to reform and revise the European financial industry, United Kingdom felt that its financial industry would be dangerously damaged.

Presently, the City in London leads in providing Europe and indeed a large number of countries around the world in conducting their financial transactions.

Submitting to the Eurozone scheme would have seriously reduced the part presently being played by the UK in global finance.

Though German Chancellor Angela Merkel has said that the UK would continue to remain an important part in the European Union, the British feel threatened.

Already the UK is suffering a seventeen year high rate of unemployment with women suffering the most.

Besides the UK, cracks are also reportedly appearing in other Eurozone countries which appear to be having doubts regarding reproportioning and rearranging central bank control by the Eurozone authorities on the central banks of member countries of the zone.

These negative macroeconomic developments in the Eurozone are not confined to its shores so that the European recessionary condition and turmoil in its businesses and bourses has travelled around the world and also dismayed and disturbed financial peace globally.

As a result, hopelessness continued to plague and pester businesses and industry with added gloom.

Reports indicated that the Shanghai Composite Index continued to decline since one week.

So also it was reported the Chinese Commodity Index was down.

Reports quoting Bloomberg indicated that commodity prices were pacing towards a three month high drop.

Decline in prices of goods and commodities was said to be universal from crude oil to gold, base metals to silver, and also aluminium, nickel, lead, tin and zinc all tumbled in unison.

Economic unravelling in Europe is said to be nightmarish and raw cotton prices are said to have fallen to a 16-month low level.

Thus the global economy is said to have gone out of gear.