Cotton trade appears well aware of the fact that Pakistan's cotton crop of this season would finish around the level of 10 million local weight bales. Another equally disturbing factor is that when crop appears short, quality aspect is neglected resulting in production of low / mix grade cotton. When the lint prices show rising trend, low-weight bales are produced.
This analyst has found bale-weight as low as below 50 Kg and weight of 100 bale lot around 14,000 - 14,500 Kg. This element of low-weight adversely affected the exporters as low weight around 21-22 tons was shipped in a 40-foot containers against 24 ton weight load increasing the ocean freight per pound by more than 10 percent.
Contrary to this, high-weight bales are produced when the lint cotton prices go below the bargain prices. When prices go against our interests, defaults in performance of contracts become a routine. These are our business ethics. This season, India is producing a cotton crop of 31 million 170-Kg bales more than three times larger than that of Pakistan's crop around 10.0 million 170-Kg bales. India has improved quality of its cotton almost to International Standards while Pakistan cotton has as yet not come out of the category of most trashy / contaminated cotton.
Pakistan is lacking behind in cotton production, productivity and quality simultaneously while our cotton and textile exports contribute 65 percent to our total annual exports. This season, we may earn US $35 millions from exports of raw cotton while would have to pay some US $1.25 billions on import of raw cotton. We import lot of wheat, sugar, other cereals, onion, garlic, edible oil and etc, yet we proudly call Pakistan a prominent agriculture country.
As regards arrivals of seed-cotton, trade is expecting up to date arrival figures around 8.3 and 8.5 million bales by 15th December, 2007. However, seasons total arrival is expected around 10 million bales. Our textile exports have slowed down and are not performing well. They demand financial concessions and other incentive to make them enough strong to fight against competitors such as India, China, Bangladesh, Sri Lanka and Vietnam.
Lint cotton prices remained under pressure during most of the week days but on last Saturday, lint prices picked up to stay steady and is noe selling between Rs 3,000 and 3,150 per maund of 37.324 Kg ex gin. Mills running hand to mouth showed buying interest and lint prices improved by Rs 50 to 75. mills want to keep enough cotton stocks to keep their mills running during week long Eid-ul-Azha holidays in the third week of this month.
Pakistan is reported to have booked some 1.5 - 1.8 million 375-lb bales to meet record shortfall of some 4.5 million bales. India being close to Pakistan is competitive for import of raw cotton. Pakistan has also agreed to the demand of textile sector to allow import of medium / short staple cotton through Wagha board benefiting the importers on lesser transportation charges.
-- Some six years back, Australia had produced some 3.07 averagely in 7 years period (1996-97 to 2002-2003 with maximum of 3.7 million bales in 2000-2001) is under severe drought attack and its production has been decreasing for the last five years and in 2007-2008 its production is estimated around only 0.6 million bales. Drought period runs for 5-6 years and after that normal rains.
-- Pakistan produced record high crop of 12.8 million 170-Kg bales in 1991-92 and after 13 years period. Pakistan produced a record high crop of 14.5 million 170-Kg bales in 2004-2005. How many years, we would take to break this record? India is breaking its previous record and making fresh record every years.
-- Some 20 years back, Pakistan produced cotton crop equal to that of India and in 2007-2008, India is producing cotton crop three times more that that of Pakistan. In 2007-2008, Pakistan is producing 10.0 million 170-Kg bales while India is producing more than 30 million 170-Kg bales.
2007-2008 World Cotton Supply & Off-take
(Million 480-lb bales):
=============================================================================
Country :Beg. Prod: Imports: Exports: Mill-use: End
Stock: stock
World 61.0 118.8 41.7 41.4 128.3 55.3
USA 9.5 19.0 0.0 16.2 4.6 7.7
China 18.7 35.5 14.5 0.1 55.0 17.1
Pakistan 4.3 8.5 3.3 0.2 12.0 3.9
India 7.3 24.0 0.4 5.3 19.3 7.1
Cent. Asia 2.2 8.4 0.3 7.0 1.7 2.1
Australia 1.2 0.6 0.0 1.4 0.1 0.4
Brazil 5.7 7.0 0.4 2.8 4.5 5.9
Indonesia 0.4 0.0 2.3 0.0 2.2 0.4
Mexico 1.0 0.7 1.5 0.2 2.0 1.0
Turkey 2.1 3.3 3.8 0.2 7.2 1
=============================================================================
Comments
Comments are closed.