Cotton sowing operation has been geared up to reach completion stage around middle of this month. However, in early sowing areas of Lower Sindh and Central Punjab, plants have attained enough height and flowers may start setting in a week's time.
The government has fixed cotton sowing target of 8.030 million acres of which 6.326 million acres in Punjab province, 1.581 million acres in Sindh and 0.123 million acres in Balochistan and North Western Frontier Province for 2007-2008 cotton season. Target for cotton production in 2007-2008 season has been fixed 14.14 million bales; Punjab 11.0 million bales, Sindh 3.0 million bales and Balochistan and N.W.F. province jointly 0.14 million bales. Field inputs like seed and irrigation water supply are sufficiently available to help achieving the sowing targets.
Growers hope the weather would help them achieving the production target easily. However, there are reports of attack of mealy bug on cotton plants in Nawabshah, Sanghar and Mirpur Khas districts and reportedly some damage has been caused to cotton plants. Last year also mealy bug damaged cotton crop in Sindh. Growers have been advised to spray necessary pesticides intensively which destroy the system of its multiplication.
However, monsoon rains also effectively control the spread of mealy bug. In Sindh, sowing of Bt. Cotton varieties are likely to cover almost 80 percent of its cotton area. Pakistan is yet to produce its own Bt. Cotton seeds on commercial basis. Recently, temperature has gone down in view of cloudy weather and scattered rains in cotton areas and this may be more beneficial for plant development.
Local lint prices have shown signs of weakness on reports of better crop prospects and better grade lots from current crop have been traded around Rs 2,600 per maund ex-gin whereas sales of a couple of hundred bales of cotton from lower Sindh stations are reported to have materialised around Rs 2,500 per maund ex-gin for middle August delivery.
Previously, new crop maiden sale was made at Rs 2,600. It means, as the harvesting of cotton draws closer, selling pressure would increase resulting some decrease in lint prices. Presently, some 200,000 - 250,000 bales are reportedly lying unsold with the ginners and the spinner-buyers are not showing due interest.
The imports of cotton in nine months period August - April,07 is reported around 2.1 million 170-Kg bales and season's total imports may touch the level of 2.8 million bales. Thus higher imports and sufficient cotton stocks with the spinners at the end of this season and above all slump in yarn / textile markets may tend the buyers move slowly. The anticipated rush in arrivals of seed-cottons may exert selling pressure on cotton prices. However, we have to wait to see the factual position.
In this situation, the exporters would try to enter the market if found viable. The All Pakistan Textile Mills Association (Aptma) and the Ministry of Textiles are making all-out efforts to get approval to their package which may give some concessions and tax remissions which may help the textile industry gain competitive position in the world textile market. Hopefully, the textile relief package may be incorporated in the upcoming budget document for the FY 2007-2008.
US unsold cotton stocks are now estimated around 7.8 million 480-lb bales taking total exports of 14.15 million bales and season's total domestic mill consumption of 5.7 million bales. Till last week, US export sales stood at 13,188,900 bales; major buyers being China 3,857 thousand bales, Turkey 2,186 thousand bales, Mexico 1,669 thousand bales, Indonesia 1,003,000 bales, Pakistan 626,000, Taiwan 518,000, Thailand 474,000, Korea 378,000, Japan 276,000 bales.
In the next couple of months, only reports of weather affecting growth of cotton crop either way would be the factors for fluctuation in cotton prices. Also demand for yarn and textile goods would also affect prices. In India and Pakistan, monsoon rains would play an important role in determining the size of cotton crop.
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