Pakistan expected to produce an all time high cotton crop

Pakistan is expected to produce an all-time high cotton crop, potentially reaching 16 million bales in 2011/12 crop season. Government officials, industry and farmers' representatives told Business Recorder here on Thursday that growers have brought more than 3.2 million hectares or 8.7 million acres of land under cotton cultivation.
Punjab province is expected to grow 12 million bales of cotton; Sindh which last year produced record cotton crop of four million bales is expected to cross four million bales target this year, officials maintained. Cotton is Pakistan's most important cash crop and due to high prices of the commodity in the local as well as in international market Pakistani farmers have increased the acreage under cotton cultivation.
The Gross Domestic Product (GDP) forecast for 2011-12 is 4.2 percent which envisages agriculture's contribution at 3.6 percent; and increased cotton production will be one of the primary drivers, said a high level government official at Planning Commission of Pakistan.
The official, who spoke on the condition of anonymity, said that there are high hopes for the industry, which suffered terribly through last year's August flooding. The inclement weather decreased 2010/11 production by 2.4 percent over the previous year, dropping the predicted 14 million-bale crop to 11.7 million bales.
Last year Pakistan was expected to achieve cotton production target, but devastating floods destroyed the crop in cotton growing areas of Punjab and Sindh provinces. Gohar Ijaz, Chairman All Pakistan Textile Mills Association (APTMA) said that due to better prices in the last season, farmers have dedicated more lands to cotton this year and the crop output would reach 16 million bales. He said that Pakistan's local industry requires 16 million bales of cotton and the government should provide seven-day a week energy including gas and power to the industry so that it could utilise the entire crop, which would generate an estimated $20 billion in the shape of textile products exports.
According to Ibrahim Mughal, Chairman AgriForum Pakistan farmers across the country have brought nearly 8.7 million acres of land under cotton cultivation and if the government provided timely assistance to farmers this year Pakistan's cotton production could exceed projected target of 15 million bales due to favourable weather conditions and better moisture level of soil. The cotton crop contributes 1.4 percent to Pakistan's GDP. Cotton production should be around 16 million bales this year, Pakistan's textile industry needs around 15.5 million bales of cotton and rest of the produce would be exported to other countries, Mughal added.
As the new cotton crop enters the market its price declines, Mughal said adding that at that time the Trading Corporation of Pakistan (TCP) must intervene in the market to ensure that middlemen do not exploit the growers. Tariq Mehmood of Pakistan Kissan Itehad said that higher domestic prices have encouraged farmers to increase acreage under cultivation. Spot rates touched a peak of $4 per kg this year due to short supplies and high international prices.
If Pakistan reaches its target of 16 million bales, it could reverse the trend of decreasing cotton production in Punjab, one of the largest and most important agricultural regions in the country, he added. According to official data over the past three years, the province's cotton production has decreased by almost 12 percent, falling from 8.8 million bales to 7.8 million. On the other hand cotton domestic prices have dropped to an 18 month low due to a slump in the international market and enhanced production.
Cotton prices in the domestic markets plummeted by Rs 200 per 40 kg with a price of Rs 6200 per maund, which is an 18 month low. Cotton price four months ago was at Rs 14000 per maund, which due to enhanced production and slump in the international markets came reeling down to less than half.