The running cotton season is now dragging towards close and growers are now planning for next season. Most of seed-cotton has arrived at ginneries (about 8.9 million bales) and around 8 percent is left behind.
Growers' intentions for next cotton sowing appear quite optimistic and the government should be quite alert to any possible early attack of boll-worm.
The current crop is likely to finish around 9.6 to 9.7 million bales ex-gin.
To ascertain the latest national spinning capacity and cotton consumption by spinning mills, some circles are demanding fresh physical survey of all spinning / textile mills by private companies in collaboration with Textile Commissioner's Organisation and All Pakistan Textile Mills Association.
Again, this season, cotton growers of Balochistan did not get due price of their cotton because the three local ginning factories were reluctant to purchase seed-cotton from them.
Reportedly, these three factories produced less than 4,000 bales, against their ginning capacity of 50,000-60,000 bales whereas the growers reportedly produced seed-cotton equivalent to around 100,000 bales.
Purchases of most of the seed-cotton was handled by middlemen who squeezed the growers on rate and payments.
Balochistan government should hold inquiry into the matter as to why the three ginning factories in Nasirabad Division of Balochistan failed to procure seed-cotton up to their capacity.
NWFP government should provide necessary facilities to encourage cotton cultivation in the vast areas of virgin lands along Right Bank Chashma Canal and also encourage private sector for installing ginning factories there.
During last week, cotton prices remained steady to firm in local market although buying interest remain restricted.
Lint prices registered an increase of Rs 50 to Rs 75 per mound. Better grade cotton was selling between Rs 3,300 and Rs 3,400 per maund, average grades between Rs 3,100 and Rs 3,250, while lower grades were down to Rs 2,800 per maund ex-gin.
The tug of war between ginners (sellers) and spinners (buyers) was going on price, each one dragging the price tag to its side.
On January 16, total stock of unsold cotton was around 1.8 million bales which would be reducing in the coming weeks as fresh arrivals would lag behind cotton lifting by spinners.
In anticipation of Eid-ul-Azha holidays, falling towards the end of this week to the beginning of next week, activities in cotton market have slackened.
Press reports indicate that banks have extended the period of financing for cotton and sugar from seasonal basis to round the year.
As such, the banks have asked State Bank of Pakistan to make amendment in the Banking Companies Act 1962 to regulate the financing against cotton and sugar from seasonal basis to whole year basis.
New York Future Cotton Market kept inching forward. Ruling March contract gained 1.22 cents and May contract was up by 1.12 cents to finish at 75.94 and 77.02 cents a pound, respectively.
In the week ending January 15, US sold 166,000 Running Bales, of which main buyers were Mexico 33,100 bales, Turkey 25,600 bales, Thailand 24,900 bales, China 16,500, Indonesia 13,500, Korea Rep 11,300 and Brazil 11,300 bales.
During this period, US made shipments of 354,600 bales. Up to date position is as under:
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Upland Pima Total (Fig: Million Bales)
Sales 8.908 0.400 .308
Shipments 4.150 0.344 4.494
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Prominent buyers of US cotton (both Upland and Pima), in descending order, were: China 3.323 million bales, Mexico 1.562 million bales, Turkey 0.745 million bales, Indonesia 0.581 million, Canada 0.419 million, Korea Rep 0.369 million, Pakistan 0.289 million, Japan 0.267 million, Brazil 0.256 million, Taiwan 0.255 million, India 0.176 million, and Bangladesh 0.101 million bales.
Pakistan was top buyer of Pima at 83,300 bales. Of the 13.2 million bales export sales target in 2003-04 season, US has achieved 70.52 percent and balance is likely to be achieved in the rest of the season.
This season, India is harvesting a bumper cotton crop of 17.0 million plus 170-kg bales against its domestic cotton consumption of 16.5 million 170-kg bales.
India adopted Genetically Modified Technology only two years ago and it has sown it on more than 100,000 hectares in 2003 season while globally Bt. Cotton was sown on an area of 7.2 million hectares which is about 21 percent of world area under cotton up 6 percent from last year.
Dr Hauteau predicts that in the next five years some 10 million farmers in 25 countries will plant 100 million hectares of transgenic crops.
Cotton activities are likely to resume normal level from Monday, the Jan 26. World cotton prices are likely to firm up on lower availability position in the next 2 or 3 months after which the prices may go down on reports of high sowing intentions and larger cotton area next season.
Yarn position is reported fairly good in local as well in world markets which would support cotton prices.
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