New crop cotton dispatched by Punjab ginnery

While the Sindh ginners from Sultanabad, Sanghar and Tando Adam have sold 5,800 bales new crop (2007-08) cotton for delivery extending from the 15th of July to 15th of August 2007, two factories, viz one each in Burewala and Sahiwal in Punjab have sold 100 and 300 bales of new crop (2007-08) on ready delivery on last Wednesday at Rs 3000 and Rs 3030 per maund (37.32 kgs) respectively.
Out of the above sales, the first delivery of 200 bales from Sahiwal has already been effected. Thus a token quantity of new crop cotton has already been ginned, pressed and delivered.
New crop (2007-08) Sindh cotton sold about 12 days ago for forward delivery at about Rs 2540 per maund (37.32 kgs). A prominent ginner from Sultanabad was offering his new crop lint at Rs 2700 per maund for delivery in August 2007 but there seemed to be no buyers at this price. However, later in the evening a ginner from Tando Adam in Sindh sold 600 bales of new crop at Rs 2800 per maund with delivery from the 1st to the 15th of August 2007.
In ready business, an assortment of current crop (2006-07) is being offered at prices ranging from Rs 2600 to Rs 3000 per maund (37.32 kgs) but there are few takers. In new crop (2007-08) business, ginners are offering small quantities from Punjab at Rs 3000 to Rs 3030 per maund.
Only about 30,000 bales of cotton from the current crop (2006-07) remain unsold with the ginners which could disappear from the market over the next few weeks. Therefore, both imported cotton as well as new crop (2007-08) domestic lint are expensive.
Though the yarn prices in the domestic market have shown some improvement, export sales of yarns are said to be selling routinely. One textile agent, however, said that yarn prices are on the firm side. It is thus expected that with the global tightness in cotton prices and with no carryover of cotton in the domestic market from the current season (2006-07) into the next season (2007-08), lint prices should therefore continue to maintain a higher level.
The seedcotton (kapas/phutti) prices for the small quantities of the new crop which are trickling in remain well held. In Sindh, new crop (2007-08) seedcotton was being quoted from Rs 1225 to Rs 1250 per 40 kgs, while in the Punjab it reportedly ruled from Rs 1350 to Rs 1375 per 40 kgs on Thursday.
Cottonseed (binola/kakra) which was selling at Rs 640 per maund (37.32 kgs) in Punjab three days ago was being quoted at Rs 575 per maund on Thursday. Three more ginning factories in Sultanabad in Sindh are starting ginning within the next two or three days time.
From various reports received up to now, despite some rains, floods or pockets of pest infestation, the overall new crop (2007-08) condition in Pakistan is being described as satisfactory and could yield 14 million or more bales (170 kgs).
However, the force of monsoon rains in Pakistan and in surrounding countries in the region is in full swing. This phenomenon will last in Pakistan for the next two to two and a half months. The behaviour and pattern of the prevailing monsoon cycle will determine the size and quality of the cotton crop in Pakistan.
A recent warning from the Food and Agriculture Organisation (FAO) from Rome said that desert locust swarms from Ethiopia and northern Somalia could cross the Indian Ocean and reach India and Pakistan and could be potentially dangerous and needs monitoring.
The swarms of locust can have harmful consequences for our agriculture which can damage crops in southern and western Pakistan. Locusts breed prolifically which can cross over to other areas and inflict damage to the crops.
Despite government announcement of various measures to assist the textile industry in Pakistan, various sub-sectors continue to criticise and warn the government that if further steps are not taken soon, the industry may collapse and render hundreds of thousands of workers jobless and endanger recovery of bank loans.
However, advisor to Prime Minister on Finance Dr Salman Shah has reportedly stated categorically that the government is in no position to provide any further relief to the textile industry. Besides paucity of funds with the government, Salman Shah felt that substantial assistance has already been provided to the textile industry and it should now improve its own working.
Sharp decline in cotton plantings report issued by the United States Department of Agriculture (USDA) last week for sowing in USA during 2007-08 pushed up the futures prices this week on the New York cotton exchange in the open outcry sessions.
The sowing in 2007 would be at an 18-year low of 11.1 million acres. The report said that based on expected harvested cotton acreage with a yield of 820 lbs/acre last year, the US cotton crop may reach only 16.8 million bales (480 lbs), down sharply from the June USDA production report estimate of 18.8 million bales.
In the outgoing season (2006-07), the United States harvested 21.59 million bales of cotton. July 4, 2007 (last Wednesday) was a closed holiday (Independence Day) in the USA and therefore the next deliberations on the New York futures price will be those of Thursday. despite some restraints in China buying being reported at present, fundamentals for cotton remain on the positive side.