Premium for producing contamination free cotton not paid

Jan 13 - 19, 2003

Cotton the main pillar of Pakistan's economy is sure to give a strong support to the textile industry as the current crop is sure to go beyond the targets this year.

Though the correct estimation of the current cotton crop is positive to cross the mark of 11 million bales yet the exact size of the crop has become a talking point due to different views about the size of the crop. The active players in the cotton business are however sure that a rich cotton crop is estimated this year. Handsome arrivals during past two months are enough to substantiate the estimates for a good crop this year.

Wahid Balagamwala, one of the leading ginners while commenting on different views about the size of the crop told PAGE that sometimes reports about decline is purposely unleashed by big cotton players to get a better price of their holdings. Brushing aside all speculations about the decline in the cotton crop, Wahid however regretted that despite a good cotton crop the present elected government is not honouring the cotton policy in letter and spirit. Elaborating his allegations, he said that the government had offered certain premiums to the growers as well as the ginners for producing contamination free cotton. Despite production of contamination free cotton no premium has been given so far neither to the growers nor the ginners. This attitude he regretted giving way to the apprehensions that this government is deviating from the set policies of the previous set up of the government. He expressed the hope that the present elected government would ensure consistency of the policy to get a better cotton crop in future also. The province of Balochistan which has been added in the cotton cultivation scheme is producing much better results and has the yielded a crop of 40,000-50,000 bales of contamination free cotton and better staple this year.

Although the area under cultivation has been reduced as compared to the area last year, however the crop is certain to surpass the figures of last year. It is said that previously the per acre yield which was somewhere 15 maunds has jumped to the level 22 maunds owing to favourable climate conditions, use of better pesticides, fertilizer and overall crop management.

Regarding the government intervention into the cotton business, it is said that the Trading Corporation of Pakistan which was suppose to lift cotton at the rate of Rs2000 per maund fixed by the government could not lift even a single bale out of the market as the growers are getting much better price ranging from Rs2100 to Rs2150 per maund. That is a good sign for market stability.

Wahid said that chance for export of cotton is also bright this year due to improved international prices. He said that Pakistan exported cotton of lower grade to Bangladesh recently at a price of 50 cents a pound. He said that there was good demand for cotton in the international market where prices are quoted over 52 cent a pound, however higher prices in the local market are not allowing to transpire more business. He said that at present the total demand of cotton in the local textile industry is estimated around 12 million bales which are likely to grow in the coming years due to increasing textile exports from Pakistan. He expressed the hope that the government will take care and protect the interest of the growers as well as the ginners to ensure good cotton crops in future also.

As far as the current cotton crop was concern, if the pace of arrivals of cotton is maintained next month, the production would be far more than last year's production of 10.3 million ex-gin cotton bales.

Punjab has registered an increase of 14 per cent to 6,777,390 bales meaning additional production of 841,728 bales.

Cotton crop in Sindh is reported to have surpassed the production target of 2 million bales by 0.186 million domestic size bales. Despite reduction of 5.93 per cent in area under cotton cultivation, as compared to last year recorded last year, the overall cotton production has improved significantly due to better crop management. Ghotki district has topped the production list with 0.558 million bales, followed by Sanghar, Khanpur, Naushero Feroze and Hyderabad districts.

The seed-cotton arrivals at Sindh ginners slowed down but the price of seed cotton, cotton-seed and oil cakes retain stable. The seed cotton price was quoted at Rs850 to 1000 per 40 kg and the growers and ginners are expecting a fair dividend this year.

Despite Sindh government intention to impose ban on import of Niab-78 seed from Punjab and to develop its own seed, Punjab buyers continue to make heavy purchases of Niab-78 from Sindh. The import of cotton also continues and about 500,000 cotton bales have been booked while 85,000 bales have already been imported this year 2002-03.

The export of cotton has done little job in this season despite good price waiting in the international market. So far, 45,000 bales have been booked for sale to Sri Lanka, Bangladesh and Indonesia. However, only 9,264 bales have been shipped outside the country.

Pakistan cotton is available at 45 cents a pound in the international market, compared to 51.5 cents per pound of US cotton indicating competitive edge over the US cotton in the market.