Monsoons have again lashed almost all cotton areas of Sindh and Punjab, with showers to moderate rain. Presently, as the development of the entire cotton crop is not at one stage and is spread from flowering to harvesting stages, the impact of rains has been different from area to area and stage to stage.
In Lower Sindh and some central Punjab areas where harvesting has already commenced, quality of cotton would be affected adversely, which would reduce whiteness and yellow spots may appear.
In areas where the crop is at flowering stage and gusty winds blew before rains, reports of fruit shedding have been received. In areas where crop is between boll formation and maturity stages, the rains are very beneficial.
In larger cotton areas of Sindh and Punjab, rains were badly needed as in some areas drought-like conditions had developed, negatively affecting the growth of plants.
Some pests have also been washed away by these rains but if the rains persist for a longer period, humidity percentage would be increased facilitating the growth of boll worm. At present, overall impact of these rains has been assessed as positive, subject to appearance of sunshine in next 36 hours.
The Met Office has forecast extended rains for further 3-4 days. The situation certainly appears somewhat alarming and demands prompt and effective measures in case of infestation or boll worm attack. However, all concerned should keep strict vigilance on crop development to meet all eventualities.
It is a matter of concern for all that the percentage of flower shedding in Pakistan is very high-up to 45-while in Israel it is below 10. Only by overcoming this problem of high rate of flower shedding, we can increase our cotton crop by 30 percent.
Cotton breeders and agri-scientists should take up this point very seriously and make the varieties flower-shedding resistant.
This session of monsoons is likely to extend till end of September, intermittently. Let this crucial period up to October 15 pass as only after that some reasonable estimation about the size of the crop would be possible. Before that it would simply be guess-work.
The Cotton Crop Management Group in its fortnightly meeting held in Multan on Saturday September 10 opined that crop picture this year was not very rosy, estimating cotton crop lower than that of last year due to many reasons, including pest pressure, fruit shedding, comparatively less growth of plants and infestation by mealy bug.
The immediate effect of rains has been discontinuation of most of ginning operations in rain-affected areas and drastic reduction in cotton picking process and movements of cotton pickers in the fields till weather conditions improve.
Cotton prices are likely to go up for the time being. Again, if rains or cloudy weather extends to a week or so, cotton crop is likely to be damaged as a result of which cotton prices may firm up at a higher level.
These rains are likely to cause damage to hundreds of thousands of cotton bales haphazardly lying in open space in Pipri and Korangi warehouses of Trading Corporation of Pakistan. Reportedly, TCP is holding unsold stocks of about 431,000 bales plus some 90,000 bales (2004-05 season) undelivered against local and export sales.
Export sales of about 20,000 bales at high rates to some non-genuine companies have neither provided any bank guarantee nor any L/C and the free shipping period has also passed away. The shipments against these sales may be jeopardised. The TCP should hold independent inquiry in such default cases. The cotton lots are mixed and damaged and up to 15 percent bales have been broken due to again and again sampling in TCP warehouses.
As there is no arrangement for cleaning, mending and repairing of burst and damaged bales in TCP warehouses, the buyers' representatives left over all such bales and replaced them by sound and intact bales from other lots at the time of delivery. As such, cotton stocks are of mixed lots/grades/quality beside being broken and damaged ones.
The TCP has recently floated a sale tender mentioning it as an International Tender but agreeing to accept payments in local currency instead of foreign currency. The reason behind this unusual tender is that TCP has been declared defaulter by International Cotton Association Ltd, Liverpool, and this action bars ICA members from entering into any contract with any defaulter company. This tender will be opened on September 14.
Trade circles say that prominent international merchants would not participate in the tender, but unknown and paper companies may participate. The fate of the tender would be known on September 14 when the bids would be opened.
Reportedly, a delegation of TCP officials has programme to attend the meetings of International Cotton Advisory Committee at Liverpool this month. The International Cotton Association Ltd is also holding its annual meetings and dinners in Liverpool following the ICAC meetings.
The TCP delegation may not attend the meetings and dinner of ICA as TCP has been notified as defaulter.
The increase in cotton prices due to rains may be a temporary phase as the spinners-buyers do not appear active to buy cotton due to sufficient carryover stocks and weak yarn prices.
Cotton prices in international market also appear weak. India is likely to produce another record high crop of 25.0 million bales against its domestic consumption of 19.0 million bales. As such, India would emerge as a big and aggressive cotton exporter in this region.
After selling its cotton at around 46.00 cents per lb FOB Karachi basis, Pakistan's exporters have increased their quotations to around 46-47 cents fob Karachi. Some reports say that some exporters have received China's inquiry for purchase of a couple of thousand tons of Pakistan cotton. In such uncertain conditions, it appears quite difficult that the Chinese inquiry would receive positive response.
Local ginners are reported oversold and would like to hold up further sales. Ginners from Sanghar district complain almost all towns in the district lack sufficient fire-fighting arrangements and when fires broke out in ginning factories last year substantial damage to cotton and other properties was caused.
The District Co-ordination Officer is requested to ensure that sufficient fire tenders are available in towns to save the property and lives of the people in case of fire incidences.
On the last day of the week, lint cotton bargains of 2000 bales were concluded at prices ranging between Rs 2,115 and Rs 2,150 per maund ex-gin for stations in Tharparkar, Hyderabad and Sanghar districts. Punjab style cotton is selling on premium of Rs 75 to Rs 100 over Sindh rates.
KCA fixed the spot rate at Rs 2,125 per maund ex-gin on Saturday. The price trend looks weak but any substantial damage, if caused to cotton crop by rains and pest attack, may affect price trend otherwise.
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