Periodical report on cotton arrivals and disposals for the second fortnight of December month has been released by the Cotton Ginners" Association. According to this report, total seed-cotton equivalent to 10.24 million local weight bales have reached ginneries. Of these, exporters procured 428,000 bales and domestic spinning mills 8.637 million bales. 1.175 million bales are unsold while last year it was 1.267 million bales.
In the second fortnight of December month, the flow of seed-cotton was equivalent of 863,103 bales was while last year it was 639,645 bales. It means during this season last fortnight, seed cotton equivalent of 223,464 bales was received more than same time last year.
Total short fall from last year up to this time comes to 1,690,428 bales ie 16.2 percent. Now, the crop size may cross the level of 11.0 million bales. Abnormally high cotton prices on tight cotton supply in domestic market would certainly encourage cotton growers in Pakistan to go for early cotton sowing and to increase cotton area next cotton season to benefit from high cotton prices.
Pakistan may take advantage of this situation as its cotton crop is the earliest in the region. As such, the growers are tightening their belts for early sowing. One grower from central Punjab area said that next cotton crop may be expected as early as late April or early May months.
For higher cotton production, the farmers should get potential seeds to give better field yield. The government should give top-priority to availability of Bt cottonseed for commercial growing both in Sindh and Punjab provinces. The other important point for enhancing cotton production is the higher ginning out-turn. One World Bank Report indicates that Ginning Out-turn in India has increased very high to 51 percent. Here is the data on yields.
The data is very interesting as well as informative. It looks very strange that field yield of seed-cotton is very low in India while ginning out-turn ie lint cotton percentage is very high up to 51 percent while in China it is 31 percent and in Pakistan it is 34 percent. India grows Bt cotton varieties mostly on 85 percent of its cotton area which gives very low yield per acre high Ginning Out-turn of such cotton is very high up to 51 percent.
It means, Indian growers lose money in comparison with the growers of China, USA, Uzbekistan and Pakistan while Indian ginners get huge benefits from ginning as their ginning out-turn is the highest against other countries which has increased its production tremendously. Pakistan's field yield ie weight of seed-cotton per hectare is better than India.
Only by growing such varieties which give better Ginning Out-turn equal to that of India, Pakistan may increase its cotton production by 50 percent without increasing cotton area. For strengthening our economy, we have to increase our cotton production as well as productivity at least to the level of our domestic consumption. Pakistan is short in cotton production by 20-25%, we are excess in yarn production by 20-25% and also excess in cloth production by 20-25% but are short in garment production.
We, should, therefore make plans to increase our cotton production to our consumption level, strengthen our weaving sector to consume all our cotton yarn production and also strengthen our domestic garment industry to consume all our cloth production.
In other words, we should enhance our forward process so that we may double our exports of textile goods specially garments in next three years. The other day, Gohar Ejaz Chief of All Pakistan Textile Mills Association (APTMA) delivered his speech in the function of Lahore Chamber of Commerce and Industry in which he mentioned that in the year 2005, Pakistan's textile exports was at US $10 billions while that of Bangladesh was at US $5 billions but in last fiscal year Pakistan's exports of textile goods stood at US $10.6 billions and that of Bangladesh to US $15 billions.
Just see the spectacular performance of Bangladesh in export of textile goods when they import almost all their cotton requirements, import lot of yarn and cloth but have a very strong garment industry. When Bangladesh acquired independence in December 1971, its currency BD Takka was at 50 percent discount against Pak Rupee but now it is at a premium of 20 percent over Pak Rupee.
Gohar Ejaz shown his fears that if due facilitation in supply of energy, cut in interest rates and a duty-free market access is not ensured by the government in Punjab, the textile industry would wipe out. Serious power shortage despite high power rates, high interest rates around 16-17 percent, high cost of raw material, high rates of utilities and high transportation cost largely contribute to high production cost which make export in-competitive and un-viable.
Pakistan has great potential of becoming one of the leader in textile exports but we are losing our position to relatively lesser resourceful countries like Bangladesh, Sri Lanka, Indonesia and Vietnam who are doing much better than Pakistan in textile export performance. What we need is to take bold and right decisions, which make our textile industry enough strong, competitive and profitable in world market.
Our domestic cotton consumption, in view of adverse working conditions, is now expected to be between 13.5 and 14.0 million bales. Our cotton exports are estimated around 0.8 million bales. Thus, our cotton imports this season may be around 3.5 million bales.
The available data on domestic mill consumption, which is maintained and released by the Textile Commissioner's Organisation is very old ie one year old of December 2009. It is unfortunate that almost all our institutions are lacking in performance to a great extent.
There is no use of giving out-dated information when the information world is working on line for providing latest information very quickly. Our exports are going down. In November 10, our total imports stood at US $1.777 billions (Pak Rs 151.989 billions) against US $1.989 billions 9 =Pak Rs 170.934 billions) in October, 10 - down 10.66 percent. July-November-10 (5 months) exports stood at 8.88 billions against 7.533 billions same period last year - increase 17.04 percent.
In our local market, lint prices appear steady to firm between the level of Rs 9,000 - 10,000 per maund of 37.324 Kgs ex-gin. Phutti supply is tight and prices steady around Rs 4, 200-4,400 per 40 Kgs level. New York Cotton Futures are also fluctuating between 140 and 150 level.
India, the second largest cotton producer and second largest cotton exporter is reported to have eased cotton export controls. According to latest report, India may enhance it cotton exports to about 8 million 170-Kg bales up to September-11, Pakistan, China and Bangladesh who are also sharing their border with India would be the main beneficiary of Indian cotton exports.
This season, India is producing 31-33 million bales against 29.5 produced last year. Last year (2009-2010), India's total cotton exports stood around 8.3 million bales. In the calendar year 2011, China is poised to import 2.6 million metric tons (11.94 million 480-lb bales) of raw cotton of which 894,000 metric tons (4.11 million bales) will be imported under a one percent duty and remaining 1.71 million metric tons (7.85 million bale) under sliding duty arrangement.
One report says that for reducing dependence on imported cotton, China is planning to increase its cotton area in 2011-12 season to 5.33 million hectares from 5.00 in 2010-11 season. India is reported to have shipped about 3.0 million bales against its export sales of 5.5 million bales. This unshipped cotton of 2.5 million bales will be available for resale along with another 2.5 million bales to reach export target of 8.0 million 170-Kg bales up to September 11. This situation may ease down foreign market and stabilise cotton prices in domestic market.
In view of tight supply position, cotton prices may maintain the level of Rs 8,000 - 9,500 a maund in the first quarter of new calendar year but after March 11, cotton prices are likely to go down in anticipation of larger sowing in next season and expected earlier crop arrival in Pakistan.
Table No 1
COTTON YIELDS OF IMPORTANT COTTON COUNTRIES IN 2007
==================================================================================
China Uzbekistan India USA Pakistan World
==================================================================================
Seed-cotton (Ton/Hac) 4.21 2.28 1.02 2.83 1.99 1.71
Lint cotton(Ton/Hact) 1.29 0.87 0.52 0.91 0.67 0.62
Ginning out-turn %age 31.0 36.0 51.0 32.0 34.0 36.25
==================================================================================
World Bank Report.
==================================================================================