Unemployment rate likely to increase in coming few days

ISLAMABAD: The unemployment rate in Pakistan is expected to increase considerably in the coming few days as hundreds of ginning factories in Lower Sindh have closed their businesses while the rest would stop production till November 20.

The ginning factories in Badin, Nawab Shah, Hyderabad, Mirpur Khas, Tando Allahyar, Tando Adam, Sanghar, Jhol, and Shadadpur are forced to close their business because the crop has been destroyed and the growers are not able to supply cotton due to recent floods in Lower Sindh. The growers were being given Rs 7 billion in advance for purchase of phutti before the recent floods in Sindh, but as 75 percent of the cotton crop has been reportedly damaged in 23 districts of lower Sindh (1.8 million bales), sown on 1.6 million acres that has dashed the hopes of the ginners.

Pakistan is likely to import one million cotton bales during the current fiscal year while 0.6 million bales are expected to be exported.

Chairman Karachi Cotton Brokers' Association, Naseem Usmani told this scribe on Friday that the Cotton Crop Assessment Committee in October revised the cotton production targets. The cotton production target was fixed at 12.223 million bales during the meeting considering 170kg weight per bale. "But Pakistan Cotton Ginners' Association (PCGA) raised objection against the revised production target set by Cotton Crop Assessment Committee. PCGA which according to the Association, was set at 15 million bales while the cotton exporters are expecting 13.5 million bales, considering 150-155kg per bale weight," Usmani said.

He further said that 1.25 lac cotton bales have been so far imported from India during the current fiscal year 2011-12.

"The cotton crop production is expected 10 million bales more than the last years' production in the global market. In international market, the cotton rates have decreased considerably as compared to the last fiscal year. Cotton was being sold at $ 2.29/ pound in March but now its rate has been reduced to 95 cents/ pound in the international market", Usmani said.

Pakistan's economy relies heavily on its cotton and textile sectors. The cotton-processing and textile industries make up almost half of the country's manufacturing base, while cotton is Pakistan's principal industrial crop, supplying critical income to rural households. Altogether, the cotton-textile sectors account for 11 percent of GDP and 60 percent of export receipts.

The total cropped area in Pakistan is about 22.2 million hacters. The share of food grain crops is 54 percent, followed by cotton and sugarcane 20 percent; pulses 6 percent; oilseed crops 3 percent; fruit/vegetables 4 percent and other crops about 13 percent.

Usmani told Business Recorder that some parts of Lower Sindh are still under water and it seems that the Lower Sindh would not be able to sow Rabi crops including wheat and sugarcane.