The pace of seed-cotton arrivals has slowed down after touching peak of the season at 2.0 million running bales in the second fortnight of last October month. In fact, October month was peak month for seed-cotton arrivals in which seed-cotton equivalent of 3.91 million bales were received against 3.36 million bales received same period last year.
As compared to last season when we harvested a crop of 11.69 million local weight bales, this season crop may be extended till March month to finally reach the level around 13.5 million bales. By the middle of December month, about 80 percent of crop around 10.8 million bales may reach ginneries.
Cotton trade circles are hopeful of getting a good crop around 13.5 million bales in 2011-12 season. Last year's floods and this year's heavy rains have severely hurt the agriculture sector especially the cotton growers. Sindh growers, barring those in Sukkur and Ghotki districts, have been severely hurt financially for two consecutive seasons (2010-11 and 2011-12). In 2011-12 season, most of the Sindh growers have missed their winter wheat crop as their fields could not be cleared of stagnated rain water and cotton plants / sticks. It is estimated that Sindh growers' loss in two seasons may be over Pak Rs 200 billions (loss of about 3.5 million bales and a crop wheat) which has crippled them and most of them will have no funds to raise next cotton crop.
This will have long-term effect on their economic, social and financial positions. What the government is assisting them financially may not be more than a peanut. As a matter of fact, the economic and financial position of the Government is very weak and reportedly it had pumped huge funds running in billions of rupees into their different social schemes, diverted from social, development and service sectors, for apparently ameliorating the position of flood-rain affected people.
The tsunami of inflation, shortage of basic requirements of people and industries, failure of key-position institutions, bankruptcy of national institutions, political instability, credibility of top-position people, failure of economy and country's reputation, has already started and next three months appear very critical as we are fast reaching the point of no-return.
Despite protests by the apex bodies of business and industries and the industry workers, the government has not agreed to exempt textile sector from long four days a week gas load-shedding in Punjab. How our textile sector in general and power-loom and garment sectors in particular may not be able to meet their contractual obligations in exports. As blood is for human body so is the exports for the economy of any country.
In 2010-11, our total export were at US$ 25 billions where as alone Japan, comparatively a small country, imported clothing (garments) worth US 25 billions. As to export performance, we do no speak of giant countries like China, USA, Germany, Japan and France but speak of a few countries of this region such as South Korea whose export is at US 464 billions, Malaysia at 210 billions, UAE at 198 billions, Thailand at 191 billions, Singapore at 358 billions, Hong Kong at 388 billions, Vietnam at 72 billions, Qatar 67 billions, Israel at 54 billions, India at 246 billions and Bangladesh at 23 billions. Bangladesh has no cotton crop, imports all cotton of its requirement, imports yarn and cloth but exports clothing (mainly garments) equal to over 71 percent of its total exports but share of clothing in Pakistan's export is only 19 percent although we have a large crop and are surplus in yarn and cloth production. One can understand where Pakistan stands in export ranking.
In the last week, cotton prices in Pakistan did not show any change but there was selling pressure.
Lint prices were between Rs 4,000-5,000 for Sindh cotton depending on quality of lint and Punjab cotton was selling between Rs 5,000 and 5,400 per maund of 37.324 Kg ex-gin. On New York future market, December-11, contract remained moving around 90-91 level, Ready off-take was as usual slack from buying countries because of slack conditions in European and American markets for textile and clothing demands.
The below given table mention detail about cotton production and off-take of some prominent cotton producing and consuming countries. USDA-December figures mention world production at 123.4 million 480-lb bales whereas mill-use at 111.3 million bales- 12.1 million bales excess than its mill-use. If we look at the figures of USDA-August figures, the production is 122.7 and mill-use at 115.2 - production 7.5 million bales more than mill-use. There are chances of increase in the gap between production and mill-use as the consumption conditions are weak globally. Hence, the carry-over would also increase. This phenomena would exert pressure on cotton prices which may show decrease to some extent till at least first quarter next year.
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2011 -12 World Cotton Supply & Off-take
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(million 480 pound bale)
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Beginning Production Imports Supply Mill Exports Ending Stock to
stock use Stock use ratio
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World 45.5 123.4 36.6 168.9 111.3 36.6 57.7 51.8%
U.S 2.6 15.8 0.0 18.4 3.6 11.3 3.5 23.5%
China 11.6 33.5 15.5 60.6 45.0 0.1 15.6 34.5%
Pakistan 2.8 10.0 1.4 14.2 10.3 0.5 3.4 31.9%
India 6.2 27.5 0.5 34.1 19.5 6.0 8.6 33.7%
Central Asia 2.3 6.7 0.0 9.0 1.9 4.4 2.6 40.9%
Australia 2.6 5.0 0.0 7.6 0.0 4.0 3.7 90.6%
Brazil 7.9 9.0 0.1 17.0 4.3 3.8 9.1 111.9%
Indonesia 0.4 0.0 2.1 2.5 2.0 0.0 0.5 22.3%
Mexico 0.5 1.2 1.1 2.7 1.7 0.3 0.7 35.4%
Turkey 1.7 3.1 2.5 7.3 5.3 0.2 1.9 35.0%
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Source: USDA -WAOB December WASDE Report
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