After the clearance of first phase of monsoons, cotton harvesting and ginning activities in cotton belt of lower Sindh had almost returned to normalcy when after a pause of about two/three weeks, torrential rains again lashed this cotton area halting almost all cotton activities where cotton harvesting and ginning activities were at the maximum comparatively.
This area produces 1.5 million bales of lint cotton of 170 Kg each, about half of total cotton production of Sindh province. Fresh attack of monsoon rains started last Thursday (September 7) and is reported to continue for a week or more. Last week, some cotton areas in middle Punjab also received rains but with no matter of any concern.
Cotton activities of harvesting and ginning had already started in cotton areas of central Punjab and the activities are gaining momentum specially when cotton activities in lower Sindh have come to standstill on heavy rains.
Filed reports indicate that ginners of Punjab are aggressively buying seed-cotton from growers of lower Sindh area at a befitting rate of Rs 1,300 per 40 Kg ex-spot and transporting cotton to keep their ginning factories operational and start new factories.
After recent heavy rains in lower Sindh, this analyst visited a few cotton fields and ginning operations, low level fields and even level fields were found full of rain waters. Because of gusty winds and heavy rains, flower-shedding has been reported widely specially in late sown areas.
Some cotton areas where cotton crop was better have also been badly damaged this time by rains. Under the new system, cotton is mostly transported to ginning factories in open carts and after weighing it is spread in gin-yard for natural drying.
Almost in all factories, seed-cotton has been badly damaged by rains. Now, the spinners would prefer to withdraw from taking delivery of cotton from such areas. Unless, this present phase of rains come to halt, estimating of realistic damage to cotton appear quite difficult but field reports put damage to cotton between 50 - 75 percent of the estimated production - loss around 0.75 to 1.0 million local weight bales.
Damage to cotton was caused by over-flow of rivers/canals alongside the rivers right from Punjab to Sindh and such loss is now estimated equal to half a million bales of lint cotton. General, weather in Punjab is also no conducive to good cotton crop as beside rains, it remains cloudy while in Sindh rains and clouds cover vast cotton areas.
After rains are over, high percentage of moisture in the fields, dense vegetative growth, presence of wee and suffocation in fields would lend helping hand to spread of plant diseases and creation of different type of pests which would adversely affect quality and quantity of cotton crop.
Local lint cotton prices have again registered increase on fresh heavy rains in lower Sindh. Sindh style lint is quoted around Rs 2,650 - 2,675 while Punjab style lint between Rs 2,675 and 2,750 per maund of 37.324 Kg ex-gin. Cottonseed in Sindh is selling between Rs 550 and 575 while in Punjab around Rs 600 - 650 per 40 Kg.
The spinners are now moving to Punjab for procuring raw cotton. Present lint cotton rates are out of parity with export prices. General concern is found in spinners on cotton damage in Sindh, which was a source of early crop. Large spinning groups are also aggressive in booking foreign cotton for remote deliveries. Presently, cotton of Indian. Uzbek, African, Brazilian and Australian growths are under active booking.
Top-most exporting country of US is reluctant in offering cotton as under their pricing structure, present level of export prices does not suit them. Sale of US cotton may start when world cotton prices improve to the level of 60-65 level. China is expected to produce 28.5 million bales of 480-lb each of cotton this season and consume some 51 million bales - with a shortfall of 22.5 million bales of which 20 millions bales would be met from imported cotton and 2.5 million bales from domestic reserve stocks.
Chinese mills have to pay very high price of equivalent to US Cents 78.0/lb for domestic cotton subsidising the growers. The Chinese mills find price of imported cotton quite competitive against price of domestic cotton so Chinese government normally issue duty-free quote for import of raw cotton to local textile mills.
The Chinese mills make adjustment of local and imported prices. Heavy rains in prime cotton areas Indian states of Gujarat and Maharashtra have caused damage to their cotton crop. According to latest estimates, cotton on areas of 0.322 million hectares in Gujarat and 0.216 million hectares in Maharashtra states have been lost by rains.
In terms of production some 0.8 - 0.9 million bales haven lost in two states. The Cotton Advisory Board of India on September 1 revised downward its cotton production estimates to 27.0 million 170-Kg bales about 10.65 percent higher than last years record production of 24.4 million bales. 33 percent of cotton area was sown to Bt.
Cotton varieties. In view of higher demand locally and abroad, India is also promoting sowing of Extra Long Staple cotton. As such, some 0.16 to 0.18 million bales of ELS cotton are expected to be produced in Karanataka. Thus, this season India may become the second largest cotton producing after China replacing USA. Despite all round higher demand of raw cotton and lower production, cotton prices on New York Cotton Exchange are not picking up are restricted to a low range between 52 and 55.
However, prices for physical cotton are between 55 and 60 depending upon quality. All indicators for increase in lint cotton prices appear quite positive and after coupe of weeks, cotton prices are likely to move up as yarn prices are also supporting cotton prices.
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