Cotton sowing process has already been completed almost satisfactorily. Acreage sown to cotton in 2007-2008 season can be around 3.25 million hectares. However, actual sowing figures are yet to be declared by the government. Generally, conducive weather conditions have been more instrumental in increasing cotton yield than increase in cotton area.
However, when record high production of 12.8 million 170-kg bales was achieved in 1991-92 season, it was mainly due to S-12 seed, which sowed a miracle. This high production record was broken in 2004-2005 when Pakistan harvested a crop of 14.6 million bales which was due to very good weather almost in all cotton producing countries.
This season, no new seed has been introduced and only weather would play its role. During most of the sowing period in May and early June, the temperature remained quite high up to 49 degrees Centigrade resulting loss of moisture in lands. In the third week of this June, un-usual heavy rains with gusty / stormy winds lashed all cotton areas.
These rains were welcomed by the cotton growers but continuation of this rainy season beyond a couple of weeks may not be considered beneficial. It is good that between two rains, sky becomes clear and bright sunshine covers all areas. Except small area where cotton is reaching maturity stage, in most of the areas, cotton crop is in developmental. However, now no more rains required. Met. Office has forecast for more than normal rains. The effect of rain may be on either side. We hope for a positive effect on cotton crop.
As a result of these rains, picking of cotton in early cotton sown areas has been suspended and delayed for a fortnight. In lower Sindh where ginning factory was scheduled to start operation in new crop by 10th of July has been delayed by 10- 15 days. Unsold stocks of raw cotton from exhausting crop are now estimated around 50,000 bales. As a result of possible delay in new crop cotton, price of lint cotton have firmed up although spinners are showing little interest in cotton buying.
Stray bargain at Rs 2,800 has been reported and the ginners are asking even more as previously, one bargain at Rs 2,900 was reported. Ginners-sellers are reluctant in making any forward sale of new crop cotton in view of uncertain weather conditions. The exporters who earlier committed a couple of thousand bales have suspended offering further cotton. Presently, the crop position cannot be predicted so sellers appear to be very cautious.
In New York Future market, prices have improved appreciably. Retiring July,07 contract closed at US Cents 58.50 while October,07 contract finished at 61.50 crossing the strong barrier of 60 after long time. Lint prices in international market have firmed up on reports of depleting unsold stocks, lower production targets of new crop cotton in USA and increased buying interest specially by China.
US has committed some 12,234,000 running bales of cotton in exports; Main buyers of US cotton are: (Figures in thousand bales) China 4,396, Turkey 2,353, Mexico 1,732, Indonesia 1,088, Pakistan 672, Taiwan 543, Thailand 515, Korea Rep 401, Hong Kong 312 and Japan 301. These ten-top buyers of US cotton have share of about 87 percent.
The figures of cotton sowing assessment of US cotton crop 2007-2008 as on 1st.June,07 stand at 11,058,000 hectares and as on 1st.March.07 it was 12,147,000 hectares against 15,274,000 hectares in 2006-2007 season. The decrease in acreage from last season is 27.6 percent. Lint prices in China have improved appreciably on reports of reduced local cotton stocks and also consignment stocks.
China has stepped up buying of cotton. The investors are making long position in New York Cotton Exchange. There has been appreciable increase in almost all important commodities in US so cotton prices also improved accordingly. Crude oil prices in the world market crossed the level of US $70/per barrel after August 2006. Heavy rains in Pakistan, India and China may cause some concern about cotton production in 2007-2008 season. These factors make sufficiently a good case for bullish trend of cotton in new crop season.