The Pakistan Cotton Ginners Association (PCGA) has rejected the cotton production estimate of the Cotton Crop Assessment Committee (CCAC) describing it unfair and exaggerated and said that cotton production for 2011-12 would not be less than 15 million bales, and the government should asked the Trading Corporation of Pakistan to purchase the surplus produce of 3.4 million bales.
The PCGA Chairman, Aman-ullah Qureshi, told newsmen here on Thursday evening that CCAC did not entertain the report of PCGA representative and it distributed the already prepared report among the media men as well as members of the committee. He said that the Prime Minister should take notice of Cotton Crop Assessment Committee's fabricated and unreal report to manipulate the market and leaving both the growers and the ginners at the mercy of spinners, weavers and textile millers who have already reduced the cotton prices in unrealistic manner. He said that they were purchasing cotton at 20 to 25 percent less price than New York cotton and other markets rates.
Aman said that cotton arrivals during November and December would prove the estimation of CCAC as false and baseless. He said that the Ministry of Textile Industry should shun releasing biased data of cotton production, otherwise 65 percent of the country's foreign exchange earning cotton sector would be hit hard. The real stakeholders, particularly growers and ginners, showing great concern over the wrong anticipated estimates of cotton production 2011-12 crop season, have said that this would damage the cotton sector in the country.
The PCGA chairman said CCAC's initial meeting to review cotton production was wrong as the country was expected to produce around 15 million bales during current crop season. The CCAC estimated crop at 12.22 million bales against the actual estimate of 15 million bales for 2011-12. Qureshi said the ministry should call real stakeholders at the next meeting of CCAC scheduled on November 23, 2011 in order to give the actual crop size.
He asked the Ministry of Textile Industry Secretary Shahid Rashid not to indulge in damaging the cotton trade mechanism and should call the real stakeholders in future.
"The Sindh production is estimated around 4.2 million bales and Punjab production is estimated around 10.9 million bales during current crop season 2011-12," Qureshi said.
He said unless there was no humidity more than 65 percent after rains, the crop would not face any further production loss. He reiterated his appeal to Prime Minister Yousaf Raza Gilani to save cotton growers and ginners from financial losses as the textile millers had created a cartel to keep the prices at the lowest level in spite of this fact that New York and other markets prices are stable and higher than Pakistan.
Aman said that the government should ask the TCP to play its role as third buyer to foil the cartel of spinners, weavers and other textile millers. He said that ginners would be forced to export cotton to China and Turkey directly to save themselves from financial losses, then textile millers would have to import cotton at the highest rate by spending huge amounts of foreign exchange.
He said that textile millers should keep in their mind that rupee is depreciating rapidly and they would have to purchase cotton from different countries at Rs 10,000 per maund. Trading remained range-bound amid strong physical price and firm spot rate with plenty of compensatory deals, traders at Karachi Cotton Association (KCA) said. KCA spot rate committee kept the spot rate unchanged at Rs 6,100 per maund keeping in view the interest of ginners having poor grades for getting good returns, floor brokers said.
They said leading mills eyed fine lint in Punjab and Sindh stations while spinners bought odd lots for blending purpose. However, fine lint fetched slightly higher price as compared to previous day's trading at around Rs 6,600 per maund. The mills and spinners bought 85 percent of total market deals as they purchased all grades on competitive rates, while private sector commercial exporters bought select lots in Punjab and Sindh.
Cottonseed changed hands around Rs 2,400 per maund to Rs 2,900 per maund in Punjab stations while in Sindh stations cottonseed fetched Rs 1,950 per maund to Rs 2,650 per maund, floor brokers said. Most of the deals were of medium grade that changed hands as such grade was accepted by textile sector due to absence of fine quality lint in abundance, said an analyst.
He said due to pressure on New York cotton prices, the domestic market was also feeling brunt. He said Sindh stations fetched prices around Rs 5,800 per maund to Rs 6,000 per maund depending on grade. Besides, few ginneries were ginning better cottonseed with less contamination around 5-6 percent. Ahmad said better grades would start coming in the market in plenty after Eid ul Azha as most of the stocks of cottonseed in Sindh would dry. He said the ginneries in Sindh and Punjab were still busy in blending in order to average their cost price.
He said availability grades (1505 grade I, 1467 grade II and 1503 grade III) has not been possible in plenty due to non availability of fine grade cottonseed. He said prices of low grade maintained their level because of higher demand of fine grade during the trading session. He said buyers in Punjab and Sindh also made compensatory deals at around Rs 5,650 per maund while spinners bought odd lots around Rs 5,100 per maund to Rs 5,200 per maund.
He said around 21,000 bales in Sindh and Punjab stations changed hands on ready delivery basis, which fetched better price than spot rate. Ahmad said New York futures market remained under correction as December stayed at 96.26 cents per pound and March 2012 stood at 95.42 cents per pound. Cotlook A index closed at 109.65 cents per pound.
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