KARACHI: The local cotton market on Thursday remained stable and volume remained low. Cotton Analyst Naseem Usman told that Spot Rate Committee of the Karachi Cotton Association closed the market on Rs 12900 per maund on the first day of the cotton season of 2021-22. The rate of cotton in Sindh is in between Rs 12800 to Rs 12900 per maund. The rate of cotton in Punjab is in between Rs 13500 to Rs 13600 per maund.
The rate of new crop of Phutti in Sindh was in between Rs 5700 to Rs 5800 per 40 kg. The rate of Phutti in Punjab is in between Rs 5800 to Rs 6400 per 40kg. The rate of Banola in Sindh is in between Rs 1900 to Rs 2000 per maund. The rate of Banola in Punjab is in between Rs 2000 to Rs 2100 per maund.
400 bales of Shahdad Pur were sold at Rs 12900 per maund, 1000 bales of Tando Adam were sold at Rs 12900 per maund, 800 bales of Sanghar wer sold at Rs 12800 to Rs 12900 per maund, 400 bales of Hyderabad were sold at Rs 12800 to Rs 12900 per maund, 200 bales of Chicha Watni, 200 bales of Burewala and 200 bales of Sahiwal were sold at Rs 13500 per maund.
The Economic Coordination Committee of the federal cabinet in its meeting on Monday reportedly considered fixing an intervention price for cotton to improve falling area under its cultivation. This decision follows other recent developments, beginning with a statement by the new finance minister that ‘price control regime on agricultural commodities needs to be reinstated to improve agricultural output’.
That Pakistan’s cotton output has fallen precipitously off a cliff needs no demonstration. According to official statistics, between FY16 and FY21, output fell by exactly half, barely retaining country’s slot among top five global producers. Although area under cultivation also fell by a quarter during this six-year period, it is a common mistake to blame the falling output on acreage.
Across the globe, leading cotton producing regions have increased cotton output not on the back of cultivated area, but by improving crop productivity, measured in yields per hectare. Over the last three decades, global cotton output has increased by over 50 percent as yields have made dramatic gains – increasing by over 5 times for Brazil, and by twice in China. In fact, productivity improvements have freed up land for plantation of other important competing crops, leading to hard won surpluses in global grain production.
Cotton Analyst Naseem Usman told Business Recorder that Pakistan Cotton Ginners Association out rightly reject the imposition of General Sales Tax on Cotton Lint and Cotton Seed Oil. While addressing the press conference Chairman PCGA Dr Jassu Mal said that it is feared that that cotton sector would be totally collapsed if the government has not withdrawn the 17 percent GST on cotton.
Moreover, in a bold but contested strategy, the West African state of Togo has bet heavily on the private sector to revive its struggling cotton industry.
“White gold,” as cotton is sometimes called, accounts for only between one and 4.3 percent of the country’s GDP, bringing 500,000 jobs for a population of 8.8 million. Yet cotton also has huge potential in terms of job creation, especially for the poorest and smallest producers in the marginalised north.
Eyeing the success of privatisation in neighbouring Benin, Togo last December sold a majority stake in its largest cotton producer, the New Cotton Company of Togo (NSCT), to a Singaporean giant.
NSCT says it aims to produce 135,000 tonnes next year and 225,000 by 2025 — a target that many say is a big ask. Production in the 2020-21 season was a meagre 67,000 tonnes, amounting to a dramatic 43 percent decrease over 2019-20.
Many farmers switched to corn and soy as the NSCT lowered the price for a kilogram of raw cotton from 265 CFA francs ($0.48) in the 2019-2020 season to 225 CFA francs ($0.48 to $0.40) the following year.
“At least 40,000 cotton producers out of 153,000 abandoned their fields this last season,” said Koussouwe Kouroufei, president of the National Federation of Cotton Farmers’ Associations (FNGPC).
The 2020-21 harvest suffered from “poor seed quality and bad weather in the north of the country,” NSCT chairman Simfeitcheou Pre said.
Togo has cast envious eyes at its neighbour Benin, where privatisation has helped cotton output to rise from 324,000 tonnes in 2015-2016 to 700,000 tonnes last year.
The Spot Rate Committee of the Karachi Cotton Association closed the market at Rs 12900 per maund on the first day of the cotton season of 2021-22. The Polyester Fibre was available at Rs 210 per kg.
Copyright Business Recorder, 2021
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