The lint cotton prices rose by Rs300/-pm and touched the figure of Rs 2,500/- and the seed cotton prices increased by Rs200/-pm to Rs1200/- during last seven days. The present rise in cotton prices is because of the controversy over the estimation of crop size by various sectors as well as the slow pace of arrival of seed cotton in the ginneries.
The cotton was sown on about 8.0 million acres in the country. The development of the crop was excellent in the beginning and there was unanimous consensus of all stakeholders on estimated size of around 15.0 million bales, another bumper cotton crop during current season.
However, the flood hit some 0.3 million acres of cotton at early stage. Later the heavy rains said to have damaged the crop to some extent both in Sindh and Punjab. Besides the pest attack also affected the crop in scattered areas. However, the extent of damage is not as alarming as being depicted by some of the sectors.
Let us analyse the situation more precisely. We have record acreage of around 80 million under cotton cultivation which is 8% more then last year. Out of which only 0.3 million acres of river bed area reportedly damaged because of flood.
The growth of cotton plants in some areas in Punjab was not satisfactory due to acute drought before the rains.
As a matter of fact, the downpour has been beneficial for the crop in the most of cotton sowing areas. The rain however affected the quality of cotton for few days besides delaying the crop. Some people having pessimistic approach are assessing substantial short fall in crop size to heat up the market.
They are projecting the matter of flower shading due to rain as a reason of reduction in crop size. Infact the extent of flower shading has been just normal as observed every year. The weather at present, is favourable/helpful to mature the upper fruit of cotton plant.
As far as the pest attack in concerned, white fly and virus appeared at early stage which remained under economic injury level. However, the boll worm particularly American and spotted worm spoiled the crop to some extent in scattered areas. The rain as well as persistent hot weather during day at night delayed maturing of cotton crop that led to the misconception about any major damage.
After conducting recent survey of the cotton field, the extent of damage has been estimated to about 2.0 to 2.5 million against the govt target of 15.0 million bales and the expected crop size is going to be 12.5 to 13 million bales which by no means is a short crop. Pakistan textile industry has carry over of 2.0 million bales and about 1.5 million bales are excepted to be imported during the current season therefore, the total available cotton to textile industry during season 2005/06 will be around 16.0 million bales which is more than the domestic consumption therefore, the mills are likely to go for easy buying during current season.
The pace of arrival at present, however, is slow due to the couple of reasons. One is off course the delayed maturing of bolls due to weather and other is higher rates of seed cotton. The growers/middle man is excepting even higher prices which are resisting the arrivals. The seed cotton arrival is expected to increase after 15th October and the prices are likely to show softness thereafter. The present price hike appears to be temporary.
[The writer is Manager (s & c) Dewan Mushtaq Group (Textile Wing).]
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