The months-long controversy on the crop size(2003-04 season) finally came to an end with the general agreement of 10 million local bales. The Government of Pakistan has fixed production target of 10.7 million of 170-kg bales ex-farm for the next season ie 2004-05.
For the last some years, the government has been found hesitant in fixing higher cotton production targets. It is believed that the production of ex-farm 11.5 million bales appears more realistic on the basis of already achieved yield on an area of 3.128 million hectares.
The new crop sowing has already been completed in tail-end area of lower Sindh while it is in progress in Hyderabad and Sanghar districts of Sindh.
The growers have high sowing intentions for cotton, and may achieve the sowing target of 3.1 million hectares for 2004-05 season.
The matter of early sowing is discouraged on the perception of higher possibility of pest-attack on timely sown crop.
This season about 15 percent fields in Sindh missed wheat sowing for getting cotton from last boll, and this area is being sown earlier than normal period. The growers prefer early sowing for getting better price of their proceed and getting enough time for sowing wheat crop.
Irrigation water is reported short, but supply has been ensured on turn. Previously, even when there were reports of shortage of canal water supply, a normal cotton crop was harvested.
It is hoped about normal weather conditions specially rains which affect much to cotton crop. At present, the ginners are holding an unsold stock of some 1.1 million bales of this season, and local lint prices are under selling pressure because of slackness in yarn market.
Qualitatively, about 25 percent cotton is of average grade with prime micronaire while 75 percent is of below average grade and low micronaire. Better to Average Grade cotton is selling between Rs 2,800 and 3,000 per mound ex-gin while low grade/low mix is selling down to Rs 2,200 per mound.
The Karachi Cotton Association (KCA) reduced Spot Rate by R 25 to Rs 2,875 per mound ex-gin on Saturday last.
Taking advantage of the low cotton prices, some of the exporters made good sales of around 20,000 bales generally in low grade cotton for shipments to Indonesia, Thailand, Taiwan, Korea and Bangladesh.
The local cotton market has been at low ebb for the last some weeks because of low buying interest.
Main reasons is the slump in yarn market and larger imports of foreign cotton which are stated at 1.2 million bales in 7.5 months period (August 3 - March 15, 04) about more than half in last one and half months.
The spinners had booked cotton some months back when cotton prices were ruling high above the level of US Cents 70.0/lb.
Some reports indicate that the spinners are offering to sell the imported cotton naturally at price lower than cost price, but buyers are showing very little interest.
Local prime cotton is available even at lower prices around Rs 2,800 per mound. The ginners holding unsold stocks are in very bad situation, and if this state of affairs continues further for a couple of months, many of the ginners may sustain very high losses beyond their capacities, but hopes are also there for revival of cotton prices to some extent as yarn market picks up.
The reports of settlement of cotton bargains with USA are also there in the market.
The local sale of imported cotton by some of the importers-spinners is a negative development for an increase in local cotton prices. It appears that either the spinners are offering sale of imported cotton for easing liquidity position or are overstocked.
NEW YORK COTTON FUTURES: The New York futures market was featured by dull conditions. In four-day working; fifth day being holiday on 'Good Friday', May and July contracts were marginally lower, finishing at 61.71 and 63.64 cents, respectively on last working day.
US export sales for the week ending April 1, 04 is reported at 254,700 running bales. Thus US total export sales up to April 1, 04 is reported at 12.303 million of 480-lb bales (upland 11.855 and Pima 0.448) and shipments at 7.987 million bales (upland 7.591 and Pima 0.396).
Prominent buyers of US cotton are: China 4.648 million bales, Mexico 1.629 million bales, Turkey 1.198, Indonesia 0.788, Korea Republic 0.463, Canada 0.413, Pakistan 0.391 million bales (including 83,600 bales of US Pima cotton), Thailand 0.369, Japan 0.350, Brazil 0.301, India 0.186 and Bangladesh 0.143 million bales.
Interestingly, shipments of US Pima has been made more than 88 percent while upland cotton shipments are at 64 percent only. US would easily meet its export target of 13.8 million bales this season ending July 04.
CHINESE COTTON PRICES: Cotton prices in China are reported weak in view of dull domestic demand. As the international prices are coming down, the gap from Chinese cotton prices is widening to around US Cents 6.5 /lb.
China is looking forward for an increase in sowing area for cotton in coming season to about 12 percent.
There were reports that some of the Chinese buyers are trying to settle with USA some cotton bargains.
Here is a table showing exports and imports of merchandise and commercial services of the world and 10-Top countries of the world.
The study of these figures would be very interesting for the readers. Among the Top-10 countries, only two viz: China and Japan are from Asia while all eight giants are from west (US and Europe). The interesting point is that these Top-10 countries earn a huge amount of $3887.7 billion (52 percent of world exports) by exporting their commodities, but also earn a substantial amount of $992.9 billion (56.3 percent of the world) through exports of their commercial services.
Some 30 top countries share 85.6 percent of world exports of commodities and 86.3 percent of world export of commercial services.
In exports of commodities, United Arab Emirates (UAE) ranks at 30, and its export was $58.1 billion, whereas in export of commercial services, Mexico ranks at 30 and its export was US $12.5 billion.
Among the top 30 countries in export of commodities, only four are from Islamic world viz: Malaysia ranking 19 at $100.7 billion, Saudi Arabia ranking 23 at $88.5 billion, Indonesia ranking 29 at $60.7 billion, and UAE ranking 30 at $58.1 billion.
Among top 30 countries in export of commercial services only two countries are from Islamic world ie Turkey ranking 26 at $17.3 billion and Malaysia ranking 29 at $12.8 billion.
Where does Pakistan with a population of about 145 million people second in Muslim world stand? Not perhaps but regretfully, there is no place for Pakistan. Just see that very small countries even 1/10th of Pakistan's population are earning in exports 20 to 30 times larger than Pak exports.
The country's economic and financial managers would burst with joy if Pak exports exceed the target of $12.1 billion in 2003-04 season.
It is proudly said that in the last four years, Pakistan has made great progress, and amassed foreign exchange of about $12 billion.
Of course, four years back, Pak economy was at the brink of bankruptcy, and now the country is in safe economic zone, but with larger people below poverty line and illiteracy.
Do the Pak economic managers think still there is lot of time to progress or have lost hope of progress in almost all sectors.
They should seriously think and act vigorously and sincerely to let coming generations live a respectable life in Pakistan.
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World Exports and Imports of merchandise in 2003.
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Exports Imports
Value in $Bbn Share in % Value in US $Blns Share in %
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World 7,482 100 World 7,765.0 100
Germany 748.4 10.0 USA 1,305.6 16.8
USA 724.0 9.7 Germany 601.7 7.7
Japan 471.9 6.3 China 412.8 5.3
China 438.4 5.9 France 388.4 5.0
France 384.7 5.1 UK 388.3 5.0
UK 303.4 3.9 Japan 383.0 4.9
Netherland 293.4 3.9 Italy 289.0 3.7
Italy 290.2 3,9 Netherland 261.1 3.4
Canada 272.1 3.6 Canada 245.6 3.2
Belgium 254.6 3.4 Belgium 234.3 3.0
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Exports and Imports of Commercial Services
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World 1,763.0 100 World 1,743.0 100
USA 282.5 16.0 USA 218.2 12.5
UK 129.5 7.3 Germany 167.0 9.6
Germany 111.7 6.3 UK 112.4 6.4
France 98.0 5.6 Japan 109.7 6.3
Spain 76.4 4.3 France 81.6 4.7
Italy 72.8 4.1 Italy 74.1 4.3
Japan 70.2 4.0 Netherland 66.0 3.8
Netherland 64.1 3.6 China 53.8 3.1
China 44.5 2.5 Ireland 48.5 2.8
Hong Kong China 43.2 2.5 Canada 47.8 2.7
Source: WTO Report.
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