Raw cotton export registered a healthy growth of over 1000 percent during the first month of current fiscal year (FY12) because of decline in prices and demand on the international front. Exporters told Business Recorder on Saturday that raw cotton export witnessed a substantial growth of 1022 percent during July 2011 as compared to the same period last fiscal year.
The country exported raw cotton worth $11.521 million during July 2011 compared with $1.026 million in July 2010, depicting an increase of $10.5 million. Month-on-month basis, export of raw cotton posted a surge of 17.38 percent or $1.706 million when compared with June 2011, as some $9.815 million worth cotton was exported in June this year.
"Pakistan's raw cotton is much cheaper than the world market varieties, which forced the international buyers to procure our raw cotton," said Naseem Usman a leading cotton broker. After touching all-time high level during the last fiscal year, raw cotton prices stood at Rs 5700-5800 per maund before Eid in the domestic market, he said and added that current cotton prices are some Rs 300-500 per maund less than world market, where cotton prices stand at $1.05 per pound.
However, he expressed concern over the damages to cotton crop after heavy rains in Sindh and Punjab. "Rain has badly hit the cotton crop across the country and it is likely that raw cotton prices will shoot up gradually after Eid holidays ahead of expected shortfall," he added.
Naseem Usman said for the current fiscal year the federal government has set a cotton production target of 15 million bales and if the target is achieved, the cotton export will reach another landmark. He said Pakistan is the fourth largest cotton producer in the world, however it is unable to produce very high quality cotton. Bangladesh, Sri Lanka and some other neighbouring countries are major buyers of Pakistani cotton.
During last fiscal year Pakistani cotton exporters enjoyed a honeymoon season as prices were hitting all-time high level while the world market was witnessing a shortfall, he added. During the last fiscal year, raw cotton export registered a healthy growth of 84 percent to $360 million from $195.5 million in FY10.