Silver fibre in distress

It is not just the yellow gold thats in vogue these days; its the white gold as well. According to figures released by the Pakistan Cotton Ginners Association (PCGA), between July 1 and September 1, 2014, cotton arrival to the factories increased by 2.1 percent to over 1.76 million bales compared to same period of last year.
Dwindling arrival of cotton bales has been observed in Sindh ginneries, which recorded a decline of 12 percent in cotton production whereas the Punjab cotton arrival shows 25.8 percent increase. This boost in production is attributed to the early (unripe) cotton picking by the farmers due to economic hardships: some farmers in dire need for liquidity tend to go for early harvest.
Of the ginned stock, over 12.6 million cotton bales were sold to domestic textile mills, whereas 56,875 bales were acquired by Sindh exporters. The Trading Corporation of Pakistan has not yet acquired cotton during the current cotton season.
Reportedly, there are about 231 ginning factories operating in Punjab and 175 in Sindh. Furthermore, the ginners are at the moment holding around 181,553 unsold cotton bales as against 220,430 bales a year earlier. Analysts opine that heavy rains have arrived in the cotton belts of Pakistan that would adversely affect the crop, diminishing cotton's yield as well as its quality thus bringing the rates down as well.
Currently, the supply of silver fibre from Sindh has retained the prices at Rs5,600 to Rs5,800 per maund. However, prices of seed cotton in Punjab were at Rs2,550 and Rs2,650 due to floods. The price is further estimated to drop once the supply of phutti is increased.
On the other hand, the Punjab Agriculture Department has instructed the farmers that cotton-picking should be stopped in the course of heavy rains and only resumed after cotton becomes completely dry. All the required measures are being pleaded to protect cotton crop damage, so that Punjab's production target of 10.5 million bales is achievable.
Talking to BR Research, a member of PCGA from Multan was of the view that the government should introduce minimum support price for cotton-seed every year as it does for the wheat. He claimed that cotton farmers are being affected due to low seed price. Moreover, low-voltage electricity distributed by power companies has severely marred the machinery and equipment of the ginners.
Thus, if this state of affairs persists, cotton growers may switch to alternative crops, leading to decreased cotton production. That may lead to greater cotton imports, consequently depleting the country's precious foreign exchanges reserves.

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Cotton crop scenario (bales in 000)

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                       Sep-13      Sep-14       chg

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Arrivals

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Punjab                644,357     810,316     25.8%

Sindh               1,081,496     951,966    -12.0%

Total               1,725,853   1,762,282      2.1%

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Sold to mills

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Punjab                550,810     728,387     32.2%

Sindh                 884,959     795,467    -10.1%

Total              12,162,321  12,584,496      3.5%

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Exports

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Punjab                  5,400           0   -100.0%

Sindh                  64,254      56,875    -11.5%

Total                  69,654      56,875    -18.3%

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Unsold bales

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Punjab                 51,197      34,864    -31.9%

Sindh                  20,370      11,477    -43.7%

Total                  71,567      46,341    -35.2%

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