The reports of pest-attack specially of Cotton Leaf Curl Virus (CLCV) on cotton crop had certainly sent a wave of concern to cotton market and there were reports of damage to cotton crop in some cotton areas in Punjab, Sindh province being quite safe. Latest improvement in weather conditions viz: drop in temperature and blowing of Southern winds, have countered the situation to some extent.
Also the pest-attack incidents mostly remained localised. The official version of loss/damage to cotton has been estimated at 15 percent. Almost all cotton areas in Ex-state of Bahawalpur forming districts of Rahimyar Khan, Bahawalpur and Bahawalnagar which produce 3.2 - 3.5 million bales are reported safe. Cotton areas falling in the districts of Rajanpur, Muzaffargarh and D.G.Khan are also report safe from pest attack.
Reportedly, the government has revised its national production estimates at 12.0 million bales. Independent circles estimate cotton between 13.0 and 13.5 million bales; Sindh producing bumper crop of 3.5 million bales. There is a forecast of rains in middle and upper Sindh within next 2-3 days while in lower Sindh, it has already started. This time also clouds have entered into Sindh from Gujarat and Rajasthan provinces of India bordering Sindh - Pakistan.
Rain in cotton areas of Punjab is also forecast in next week which may be the end of rainy season. However, by the first week of September month, rainy season may come to an end and possibilities of pest attack may continue till end of September month. The clear position of cotton crop would emerge by the end of September month. Cotton circles estimate total arrivals of seed-cotton higher by 5-7 lakh bales till end August this season than last season. It is a good news that Pakistan government has plan to introduce its own Bt cottonseed for sowing from 2010-11 season although unofficially Bt cottonseed has been in cultivation for the last more than five years and it had covered some 80 percent area in Sindh and some 25 percent in Punjab.
Crop condition in upper Sindh specially Ghotki district is reported to be in good to very good both quality-wise and volume-wise. Pakistan has only one option of increasing its yield and cotton production through wide cultivation of Bt cottonseed. Although in 2004-05 season, Pakistan harvested a record high crop of 14.347 million bales when Bt cotton was cultivated only in small area only in Sindh but it was possible due to very favourable weather conditions and till last season, we could not reach the record high production of 14.347 million bales.
This season, due to comparatively lesser rainfalls, Indian farmers may face difficult situation specially in rain-fed areas of Rajasthan and Utter Paradash provinces where there is drought-like situation. Due to low rains this season, cotton production may even be lower than 29.0 million bales produced last year.
It is estimated that by the end of August,09, seed cotton arrivals would reach 3.0 million bales equivalent. Seed cotton arrivals are estimated to reach peak level between 15th September and 15th October,09 receiving arrivals of seed cotton equivalent of 125,000 bales daily. Taking into consideration, the present situation of spinning mills relating to cotton requirements, it is understood that cotton selling pressure in cotton market may be developed after Eid holidays in the last week of September month and may continue for a month or so.
Against production estimates of 13.0-13.5 million bales, total domestic consumption may be around the same level. However, our export-oriented textile mills may import some 1.5 to 2.0 million 170-Kg bales equivalent from different sources. For some weeks, local lint prices have been ranging between Rs 3,350 and 3,650 per maund ex-gin while on last Saturday it was between Rs,3,450 - 3.550 per maund ex-gin. This time, cotton exporters remained more active in buying cotton some against export sales and some for maintaining long position.
Some international merchants are also buying cotton either directly or through their local agents. Our exporters are understood to have committed export sales of some 150,000 - 175,000 bales so far and have started shipments. Pakistan weak currency (Pak Rupee) against US dollar is lending support to export viability. In view of weak cotton demand from local spinning sector, there appear good chance of exports and total exports may touch the level of three quarter to one million bales this season. Although yarn and cloth prices have improved somewhat recently buy power shortage and load-shedding in gas in Punjab in coming winter may depress mills-consumption.
On New York Exchange, cotton prices remained depressed due to low demand and December,09 contract fell to 58 ;level and cotton experts think the market may shed another cents 2-3 further. In the international market, commodity prices are showing mixed trend while crude oil market has crossed the level of US $75.0 per barrel.
In Pakistan, share market is showing bullish trend and is going up touching the level of 8,400 in Karachi. Political developments are taking a new turn in the country. Some 15-20 years old corruption cases, involving top class politicians and senior army officers, are hot topics of discussion in print and electronic media.
The main issues of public, business and law and order importance have been left behind unattended which may caste negative effect on our economic conditions. Law and order situation and war-like conditions in Northern areas bordering Afghanistan have not improved detrimental to economic progress.
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