Ready cotton market gave routine appearance with few ups and downs since the past several weeks. Generally, cotton changes hands in a regular manner because most of the variables in our fibre and textile situation have already been factored into our cotton prices.
Some ripples were created in our cotton market because of the tremendous and sharp undulations recorded during the past couple of months on the New York futures market which was spectacular in recent history, but generally our market absorbed that volatility without much fuss.
The relatively calm and contained visage of the ready cotton market in Pakistan is amply exemplified in the stable and continuous fixation of the ex-gin price of Grade 3 cotton by the Karachi Cotton Association (KCA) over most of the past several weeks at Rs 3,300 per maund.
The final tally for this season's (2007-08) seedcotton arrivals are likely to be recorded on the 1st of April 2008 to be equivalent 11.6 million running bales on an ex-gin basis.
From this quantity, the domestic mills will have lifted close to 10.4 million bales while the exporters offtake will be about 200,000 bales. Ginners are likely to be carrying about one million bales unsold cotton at this time which is likely to be dissipated over the next four to six weeks' time.
For the incoming cotton season (2008-09) in Pakistan, already shortage of water and fear of good quality inputs like unadulterated cottonseed (kakra/binola), fertiliser and pesticides is rife amongst the growers.
However, very recent reports indicate that snows are melting on the mountaintops in the northern areas and a westerly weather system is likely to pour precipitation over wide swathes in the country.
Of particular note is the resolve of the newly installed Government of Pakistan headed by Prime Minister Syed Yousuf Raza Gilani who originates from Multan, the heart of cotton growing areas in Punjab, to spur up the economy and rectify the imbalance in order to provide more succour to the lower and middle class of people in the country.
In a related move, the vice-president of the Pakistan Central Cotton Committee (PCCC), Dr Ibad Badar Siddiqui, has stated that the federal government has devised a cotton production strategy for the forthcoming 2008-09 season in consultation with all the private and public sector stakeholders.
In the proposed cotton production strategy for the 2008-09 season, the suggested cotton output target has been set at 14 million bales. For this purpose, cotton cultivation area should be increased to 3.20 million hectares and proper arrangements should be made to make 63,000 metric tons of certified seeds of approved varieties available to the growers.
Moreover, early sowing of cotton should be discouraged and plant population should be increased to 18,000 to 20,000 plants per acre through use of higher seed rate (at least 8 kgs per acre) and timely resowing. Other inputs include continuing of subsidies on phosphate and potash fertilisers, encouraging the growers to add micro-neutrients for larger flowers and boll formation, campaigns by the ministry of agriculture to forewarn the growers on infestation of mealy bug and other control measures.
Furthermore, the cotton production strategy for the new season (2008-09) envisages assisting the weaker and average farmers to catch up with the progressive farmers, discouraging plantation of sugarcane crop in cotton growing areas and strict enforcement of the cotton control act by the provincial governments to forestall use of unscrupulous cotton seed varieties and also ensure the improvement of quality by taking appropriate measures.
Unlike the nervous and unsettled price performance of cotton futures prices in New York over the past several weeks, local lint prices in the ready market were quite steadily priced.
On Thursday afternoon, mills were restrained buyers while the ginners also did not appear to be anxious sellers. Most of the domestic mills did not appear satisfied with the condition of the textile market.
The general price ideas of lint in Sindh reportedly ranged from Rs 3,200 to Rs 3,400 per maund (37.32 kgs), while in the Punjab lint prices were said to have extended from Rs 3,150 to Rs 3,500 per maund according to the quality.
In the ready market till Thursday afternoon, 400 bales from Sadiqabad in Punjab reportedly sold at Rs 3,350 per maund (37.3 kgs); 1700 bales of cotton from Lodhran sold at Rs 3,350/Rs 3,400 per maund (37.32 kgs), while 400 bales from Vihari sold at Rs 3,500 per maund. The market appearance gave a hesitant outlook in the evening but maintained an underlying steadiness.
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