KARACHI: Increasing trend in the prices of cotton in local and international markets was seen. There was an increase in spot rate by Rs 1000 per maund. Rains are damaging the crops. About 60 lac bales of cotton will have to be imported. The first meeting of Cotton Crop Assessment Committee will be held later this month for the first estimate of cotton production. According to Pakistan Cotton Ginners Association sources, the first weekly cotton production report will be published on September 1.
During the week beginning on Wednesday after the Muharram holidays, the domestic cotton market saw an overall bullish factor in cotton prices due to increase in the prices of cotton compared to the supply of cotton.
The trading volume remained low because of continuous rains in the cotton belt.
Although the demand for cotton from textile spinners remained low but due to the very low supply of cotton, the ginners were not interested in selling cotton. The price of cotton has increased by Rs 500 to Rs 1000 per maund. Similarly, the price of Phutti has also increased. The quality of cotton is low due to the rain-affected Phutti. However, the spinners has continued buying of Phutti because there are reports that crop was damaged due to rains, making it difficult to predict actual crop production the moment. Although the US dollar is depreciating significantly and the rupee is getting stronger and stronger, the spinners have started their efforts for the import of cotton but the bullish trend dominates in the Future Trading of New York Cotton. The price of Future Trading for the month of December after decreasing by 12 American cents reached one dollar eight cents.
The price of cotton is increasing in other international cotton markets. In the United States, reports are also being received that the cotton crop is less than the first estimate. In India, there is a trend of continuous increase in the price of cotton, which is going to be one lakh rupees per candy (356 kg) again. The price of cotton is also increasing in countries like Brazil, Africa, states of Central Asia, etc.
It is currently too early to estimate how much damage has been caused to the cotton crop due to weather conditions, but Punjab Agriculture Minister Hussain Jahanian Gardizi said in a statement that recovery of the cotton crop is the top priority of his department.
Textile spinners are worried about due to the continuous increase in the price of cotton. Moreover, there is no parity between the price of cotton and yarn. On the other hand there is a recession in the markets due to tension between Russia, China and Ukraine.
In Sindh the rate of cotton is in between Rs 16,500 to Rs 18,000 per maund. The rate of Phutti per 40 kg is in between Rs 6,000 to 7,300.
In the province of Punjab, the price of cotton was Rs 18500 to Rs 19000 per maund. The rate of Phutti was in between Rs 6500 to Rs 10,300 per 40 kg.
In Balochistan province, the price of cotton was Rs 16,500 to Rs 17,500 per maund, while the price of Phutti was Rs 6,500 to Rs 8,500 per 40 kg. There was an upward trend in the prices of banola, khal and oil.
The spot rate committee of Karachi Cotton Association increased the spot rate by Rs1000 per maund and closed the spot rate at Rs 18000 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that overall bullish trend prevails in international cotton markets. The rate of Future Trading of New York Cotton for the month of December after increasing reached one dollar eight cent per pound.
According to USDA’s weekly export and sales report, sales for 2022-23, which began on August 1, was one lac, two thousand and four hundred bales.
Vietnam was at the top by buying 36 thousand and two hundred bales. India came second by buying 9,100 bales. Pakistan bought 6 400 bales and stood at the third position.
For 2023-24, Honduras topped the list by buying 26,300 bales. Pakistan bought 11,000 bales and stood second. Mexico bought 1100 bales and was in third place.
Pakistan might have to import up to six million bales of cotton as domestic output would likely fall short of target mainly due to inclement weather and high cost of inputs over the last several weeks.
Official cotton sowing data for 2022-23 season showed national level cultivated area at 2.01 million hectares, around 20 percent less than the target of 2.53 hectares. However, an increase of about 7.1 percent was seen over area planted last year.
According to first estimates issued by the Punjab government, the cultivated area of cotton stood at 1.48 million hectares, 19 percent of short of target and about 16 percent greater than the previous year. Whereas sowing area in Sindh was 0.517 million hectares, down 19.2 percent than the target and about 13 percent lower than the previous year.
Shortfall in cotton production means higher imports of the silver fibre to meet the demand of the domestic textile industry.
Cotton imports were forecast to rebound to over 5.5 million bales in 2022-23. It may touch the mark of six million bales in case production is not revived from the loss incurred due to drought as well as incessant rains. Cotton crop has been under extreme weather-related stress since its cultivation. First drought and above-normal heatwave continued to adversely affect sowing during April-June this year, especially in Sindh and South Punjab.
Then, from July 1-31, most of the cotton belt received above normal rains that also inflicted sporadic damage. Resultant deluge and inundation of cotton fields caused losses to the growers.
Intense monsoon rains in South Punjab, cotton belt of Sindh and Balochistan inflicted severe damage on the standing crop. This year, most cotton growers are unwilling to spend any more money on the under-stress crop as chances of reviving it have become slim. High humidity levels also brought on pest attacks on larger areas. Farmers were also perturbed by low cotton price, which discouraged further investments, as well. Extremely high cost of inputs including fertilisers, electricity, and diesel had already broken the farmers’ back. Commenting on the prospects of the cotton crop, spokesman of Kissan Board Pakistan said that cotton growers were devastated due to unfavourable weather, apathy of department concerned and high cost of inputs.
He said it was highly unlikely that the cotton production target would be met. Instead, he feared that cotton growers would face huge losses due to low or even no production on account of extreme weather events.
He strongly criticised provincial and federal government for not ensuring higher returns on cotton, terming it one of the main reasons behind low productivity in the ongoing season. Reviewing cotton crop 2022-23, Secretary Agriculture South Punjab, at a department meeting in Multan on Wednesday said, “Cotton crop is being minutely monitored in the province. We have appointed monitors in all the districts of cotton cultivation to review the activities of cotton”, and the monitors are visiting their respective areas regularly to share the status reports.
He was hopeful that better strategy and management would have a positive impact on crop production this season. “So far, 275 percent more production than the April sown crop is being achieved; if this trend continues, the production target will be achieved,” he said, noting that delayed application of agrochemicals on the cotton crop in the early days resulted in an increase in the number of friendly insects and keeping harmful insects below the economic threshold. He said that despite the natural calamities, better production was being obtained from the crop planted in April.
Punjab Agriculture Minister said that revival of cotton crop was the first priority of the department. Last year, he added, with better team work “we were able to revive the cotton crop”. This was why cotton has been cultivated on more area this year.
The minister said that the future of cotton was linked to integrated pest management (IPM). Implementation of IPM not only increases the yield but also significantly reduces the cost for farmers, the minister said adding that the months of August and September were crucial for better care of cotton crop.
Copyright Business Recorder, 2022
Comments
Comments are closed.