KARACHI: The rate of cotton in the local cotton market touched the highest level in 11 years at Rs 14000 per maund amid an overall bullish trend. The rate of Phutti also reached at Rs 6400 per 40 Kg which is highest in the history. Despite promises of the government of increasing the cotton production an alarming decline witnessed in the sowing area of cotton crop.
Keeping in mind the high rates in the local cotton market big groups of textiles are increasing their imports. The recommendations prepared in the light of online meeting of Karachi Cotton Association will be sent to Federation of Pakistan Chambers of Commerce and Industry. The increasing trend was witnessed in demand and rate of cotton yarn.
The trading volume remained low due to the cautious buying by the textile and the spinning sector. The arrival of cotton of new season was increasing day by day. The rate of new cotton on its arrival was Rs 12500 per maund. After that the cotton of Sindh was sold at Rs 12000 to Rs 12200 per maund but on Thursday the rate of new cotton suddenly reached at the highest level of Rs 13000 to Rs 13100 per maund.
Moreover, a ginning factory of Burewala sold 200 bales of cotton at Rs 14000 per maund which is the highest rate in 11 years. The rate of Phutti after increasing reached in between Rs 5800 to Rs 6300 per 40 Kg. In the same way Banola was sold in between Rs 2300 to Rs 2500 per maund. Up till now 2000 bales of new cotton were delivered in Sindh. Moreover, deals of 1000 to 1200 bales were finalised. Many ginners were not bringing their deals on record because the cotton season starts from 1st July and Karachi Cotton Association doesn't consider the deals finalised before July 1. The Spot Rate Committee of the Karachi Cotton Association also did not consider it in Spot Rate but added deals of old cotton in Spot Rate.
Many big textile groups are singing agreements for the import of cotton due to the high rates in the local cotton market. According to the private importers deals were finalised for the import of two lac fifty thousand bales of cotton from abroad for the new season. It is expected that import of cotton will be increased due to the high rates of cotton in the local cotton market. The difference between the rate of local and imported cotton is of Rs 3000 per maund due to which big groups were signing agreements for the import of cotton from abroad. However, small milks don't have any stock of cotton so they were buying cotton from local market. That's why it looks like rate of cotton will not drop in near future.
According to the estimates of Federal Agriculture Committee, one crore five lac bales will be produced in the country. Sixty lac bales will be produced from Punjab from cotton sowing on 40 lac acres while cotton will be cultivated on 17 lac acres in Sindh.
It is a matter of concern that cotton growers are not taking interest in sowing because they are taking more interest in growing corn and not in cotton. They got three crops from corn as well spray cost is very low as compared to cotton plants.
Farmers who grew cotton on 100 acres now growing cotton on 50 acres and growing other crops or corn on remaining area. Private sector is worried regarding cotton production estimates for the next year. According to the estimates of Federal Agriculture Committee cotton will be cultivated on 40 lac acers but according to the sources cultivated area will be 7 lac acres less which means cotton will be cultivated on 33 to 34 lac acres.
In Sindh cotton will be cultivated on 17 lac acres but sources are claiming that actually it will be cultivated on 14 to 15 lac acres. If it happens, then it is feared that production of cotton will be less than last year because especially last year weather conditions were not favourable. Moreover, due to the massive attack of White fly and Pink Ball Worm the cotton production decreased from 85 lac bales to 57 lac bales. This year cotton crop will be affected due to water shortage.
The old stock of cotton was available in Sindh in very limited amount while in Punjab ginners had the stock of thirty thousand bales of old cotton. They were demanding Rs 12500 to Rs 13000 per maund for the old cotton. However, trading volume was low.
The Spot Rate Committee of the Karachi Cotton Association has stabled the rate of cotton at Rs 12300 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that during the last week bullish trend was witnessed in international cotton market. The rate of New York Cotton was on 85 American cent which is highest.
According to the weekly export report of USDA exports witnessed an increased of 6 percent. Pakistan is on the top with the import agreements of more than 72000 bales and India is on number 2 with the import of more than 4200 bales.
The new crop of cotton has started arriving in Brazil. The rate of cotton is stable in Brazil. There is some time in the arrival of cotton crop in Central Asia, Sudan and Argentina. The rate of cotton is stable there.
A sharp increase was observed in the rate of cotton in India. Increase of Rs 1000 per candy was witnessed in India. According to the sources rates were increasing due to the increasing demanded of yarn and fabric.
A meeting was held to improve the cotton crop on June 1st 2021 under the chair of minister agriculture Sindh which was attended by all the stake holders. The issues relating to sowing, controlling the attack of insects on cotton crop and disbursement of subsidy given by federal government to cotton farmers in a transparent way were discussed.
Chairman Pakistan Cotton Ginners Association Dr Jassu Mal proposed that awareness seminars will be held to create awareness among the the stake holders and farmers regarding increasing the production of cotton
The area under cotton cultivation last year was 3.821 million acres and it is decreasing continuously for the last three years. This year, it is estimated that area under cotton sowing will remain 3.31 million acres, showing a decline of 13.4 percent as compared to last years. However, the shortfall is more if it is calculated against the assigned target.
Sources in the Crop Reporting Services, Punjab, told the Business Recorder that by May 31, 2021, (cotton sowing season end date), area under cultivation was recorded at 3.115 million acres, which comes to 94.1 percent of the expected cultivated area.
However, they said that 'Girdawari' to ascertain the actual area under cotton sowing will be launched soon and final figures, hopefully, will be tabulated by the end of second week of June.
Break-up of the initial survey shows that cotton was sown 4 percent less in Sargodha Division as compared to last year, 23 percent less in Faisalabad, 16 percent less in Sahiwal, 19 percent less in Multan, 27 percent less in D G Khan and 3 percent less in Bahawalpur Division against last year.
Director General Agriculture (Extension) Dr Anjum Ali while talking to this scribe said they were still in the review phase of cotton sowing area. However, he said that initial figures suggest that it was sown over 3 million acres of land but the final figures would come by the middle of the current month. He also said that they were hoping 3.3 million acres of sowing was expected.
Asked about decline, he said that cotton has now a very stiff competition with the 'maize' crop which has more production per acre and bring more profit for the growers.
Dr Zafar Hayyat, Farmers Bureau Pakistan President and a Progressive Grower from Multan Division, claimed that cotton has sown over 25-30 percent less area in Shujaabad and Jalalpur Peer Wala, two major cotton growing areas this year. He claimed that big farmers having over 100 acres of land has reduced their area by 50 percent during the current season.
He said unavailability of 'Germplasm' having resistance against current weather and other hardships, poor germination rate of available seeds and lower plant vigor were the main reasons behind decline in cotton sowing. He said that available pesticides also do not have effective performance against white fly, most harmful pests of the cotton crop. Farooq Ahmad Bajwa, a cotton grower from Bahawalnagar claimed that area under cotton cultivation would remain around 2.5 million acres and production will remain 4 million bales.
Few days back a meeting of FPCCI Raw Cotton Committee was held which was chaired by President Karachi Cotton Association who is also the convener of the Raw Cotton Committee. The meeting was attended by experts. The experts were consulted regarding what steps should be taken for the revival of cotton crop.
An office bearer of Ministry of National Food Security and vice chairman Pakistan Central Cotton Committee Dr Muhammad Ali Talpur told that how cotton production target was fixed. He also said that production target was fixed as well as cotton cultivation area was demarcated after consultation with the agriculture minister of four provinces. The recommendations of this meeting will be presented to FPCCI and after that they will be included in the budget.
Copyright Business Recorder, 2021