Presently, Pakistan has been under heavy pressure of monsoon for the last two weeks. Rainfall has caused more damage to cotton crop in lower Sindh as compared to upper Sindh. Punjab province has also received rains intermittently but cotton crop is still reported safe.
However, because of floods and heavy rains, the cotton crop of some 1.2 million bales in river-bed areas known as Kutcha area, which is stretched from Okara (Punjab) to Hyderabad (Sindh) has been badly damaged and the loss may be around 1.0 million bales. The cotton crop in riverbed area was almost lost previous year and this season too that is facing similar situation.
Although, a couple of month back, weather forecasts for rains was reportedly below normal but actually it has been found above normal. Floods follow rains and pest / diseases follow floods.
The crucial period for cotton crop would go upto 15th of October and September month, known as Setamger month, is considered more dangerous for the cotton crop. To get a fair idea of the size of this cotton crop, we have to wait till middle of October 2006.
These days, cotton in some early cotton sown areas, was at harvesting stage, which has been disturbed by heavy rains. This writer visited cotton fields last week of lower Sindh where cotton plants looked very clean and healthy but in some low-lying areas, cotton plants were becoming yellowish / yellow due to stagnation of rain water. Upcountry reports indicate that water absorption position of lands has almost reached saturation stage and water stagnation has started in the fields.
In view of these rains, cotton plants gaining height and vegetative growth. As such, the maturity period of plants would be delayed by couple of weeks. At this stage, cotton crop in Punjab is doing well but more rains may damage the crop. Private crop estimates put it around 12.5-13.0 million bales but fears are there for more damage.
In India, rains are very heavy in Gujarat and Maharashtra States and 10-15 percent damage is assessed in these two states. This season, India has cultivated cotton on 9.4 million hectares of which 33 percent is Bt Cottonseed. Production of Desi cotton variety in Rajasthan State is feared as low as 50 percent of last year's production. India is expected to consume some 19.0 million bales out of estimated production of 26.8 million bales of 170-kg each in 2006-2007 season.
India is likely to emerge as the second largest cotton producer of the world after China retaining its position as the second largest exporter of raw cotton. India may export some 3 to 4 million bales of 170-kg in this season. However, India is also in the grip of heavy monsoons and only after its clearance reliable production estimates would be made.
The Government of Pakistan has launched a programme of producing 100,000 bales of clean cotton, from Sindh 30,000 bales and Punjab 70,000 bales, under the Ministry of Textiles. This project would be jointly carried out by Trading Corporation of Pakistan (TCP), Pakistan Cotton Standard Institute (PCSI), Pakistan Cotton Ginners Association (PCGA and Agriculture extension departments of each province. On certification of seed-cotton as clean cotton and of Grade II by PCSI concerned cotton classer, the TCP would make payment of premium to the seed-cotton supplier (he may be a grower or a middleman) at the rate of Rs50 per maund of seed-cotton.
The procedure for determining the level of contamination in the cotton is so defective that the certification of PCSI classer cannot be checked or verified at any later stage. It is almost very difficult to ascertain the name of suppliers involved in production of premium lint cotton lot for the payment of premium. The premium of Rs50 on seed-cotton works out to about Rs150 per maund of lint. Who will finally pay this premium to the ginners.
Reportedly, premium for staple length above 1-1/32 inches staple length would also be paid to the supplier / ginner. A huge amount of around Rs70 is involved in this scheme but there appears no any real benefit to cotton. Instead, the government should implement Cotton Grading System at ginning stage, which is mandatory under Presidential Ordinance 2002.
On international level, lint cotton is classified under different grades through Standardisation of Cotton and Pakistan has already developed cotton standards, which if implemented at ginning stage would substantially improve quality and value of Pakistan's cotton. The government has many times tried the scheme of producing clean cotton but all went in vain. Almost all documents on international level speak of Standardisation of Cotton through implementation of the Cotton Grading System but not of production of contamination-free / clean cotton.
As a matter of fact, implementation of the cotton standardisation system at ginning stage guarantees payment of billions of Rupees to growers by the buyers - the spinning industry as premia on grade and staple length of cotton and it is not acceptable to concerned quarters so the unrealistic scheme of producing clean cotton has been advocated.
In the international market cotton is not traded on the basis of grades, which are based on colour of cotton, amount of trash and ginning treatment. If cotton grading system is implemented in letter and spirit, quality of cotton would substantially improve but if we improve our methods / systems of cotton picking, storing, handling, transporting and packaging, element of contamination would be drastically reduced. The system of applying premium for better quality and discount for poor quality cotton is most scientific and realistic and is implemented internationally.
Internationally, cotton price is mostly determined on the basis of amount of trash in the cotton but not on degree of cleanliness advocated in Pakistan. The government should immediately stop this scheme of producing clean cotton and apply Cotton Standardisation System with Grdaing System and Pricing System based on premia and discounts to achieve goal of improving quality of cotton. For this, the government may take fresh advice from any international cotton agencies on this matter.
Local cotton market remained steady to firm on short supply due to heavy rains in cotton areas; more in lower Sindh than upper Sindh and Punjab. Trading Corporation of Pakistan has recently sold 28,000 bales of cotton through tender at prices between Rs2,350 - 2,375 per maund ex -TCP Karachi warehouse. Because of lower grade due to heavy rains, lint prices of new crop cotton are lower around Rs2,450 - 2.500 per maund in lower Sindh while Punjab new crop cotton is fetching better price around Rs2,500 - @,600 per maund. If the rainy season further extends, lint cotton prices may further move up on tight supply position.
Prices on the board of New York Cotton Exchange have shown weakness primarily on reports of higher estimates of US cotton crop at 20.4 million bales of 480-lb while the private estimates put it between 18.5 and 19.0 million bales this season. China has been quite on fresh buying foreign cotton. Since subsidies under Step-2 would not be available to US growers, there strong chances of US cotton going under loan, which may decrease the ready availability of cotton for a longer period. As such, target of US exports may not be achieved and exports may be around 14 - 14.50 million bales.
Although, there were reports of heavy rains and flood in some parts of China, there appears no concern from China. However, Chinese demand of cotton would increase, which may oblige China to go for import of some 20.0 million bales of 480-lb each in 2006-2007 season. Cotton trade expects prices to go beyond the level of 60.
Comments
Comments are closed.