KARACHI: The rates of cotton remained stable. Unprecedented increase was seen in the rate of New York Cotton. Farmers of South Punjab are actively working for increasing the production of cotton. Senator Taj Haider has appealed for increasing the production of cotton.
There is a proposal for conducting a seminar for the expansion of textile sector and production of cotton by Federation of Pakistan Chambers of Commerce and Industry, All Pakistan Textile Mills Association, Pakistan Cotton Ginners Association and Karachi Cotton Association. Seminars should be conducted before the start of sowing season or in the middle of the season so that it can be helpful in increasing the production of cotton.
In the local cotton market during the last week the rate of cotton remained stable. Although, Karachi Cotton Association increased the spot rate by Rs 500 per maund and closed it on highest level of Rs 21,500 per maund. The reason behind increasing the spot rate is some trading on high rate. Up till now ginners and traders had limited amount of stock which they are selling on high rates.
After fluctuation in international cotton markets bullish trend prevails. During the last week the rate of Future Trading of New York Cotton for the month of July witnessed a fluctuation of 21 American cents. The rate jumped from 135 American cents to 151 American cents and then closed at 145.63 American cents. Due to high rates of dollar and increasing rates of cotton the import of cotton was also limited because there is no parity of the rate of cotton.
On the other hand due to increase in interest rate by Rs 2.50 the rate of KIBOR increased by Rs 14 due to which textile sector and industrial sector is showing their concerns. Federation of Chambers of Commerce and Industry, Karachi Chambers of Commerce and Industry and Karachi Cotton Association are against of increasing the interest rate.
In most areas of the country sowing season of cotton has already started. There is information regarding availability of water in most areas of Sindh but there are complaints regarding scarcity of water in Punjab. On the other hand due to the shortage of diesel farmers face difficulty in running tube-wells. This year APTMA and FPCCI are actively working for increasing the production of cotton. FPCCI is relating cotton to the survival of the country. On the other hand APTMA has appealed the government to fix the support price of Phutti at Rs 8000 per 40 kg.
Pakistan Agriculture Committee has fixed the target of production of cotton at one Crore ten lac bales.
Few days back Ahmedabad Chambers of Commerce and Industry conducted a Textile Leadership Conclave 2022 which was attended by 600 delegates from all over India.
While addressing the Conclave, Secretary Textile India Jardosh Darshana assured that government will take steps for expanding the textile sector in India.
However, Chairman Karachi Cotton Brokers Forum Naseem Usman has appealed to the chairman APTMA Abdul Rahim Nasir, chairman KCA Khawja Zubair and convener of the cotton committee of the FPCCI Malik Talat Suhail to hold a seminar and put pressure on the government that they should take steps to increase the production of the cotton.
However, cotton is available in Sindh and Punjab in a very limited quantity. The rate of cotton in Sindh and Punjab is in between Rs 18,000 to Rs 21,000 per maund. The rate of Banola, Banola oil and oil is also increasing.
The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 500 per maund and closed it at Rs 21,000 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that after fluctuation in international cotton markets a bullish trend prevails in international cotton market. As per USDA weekly export and sales report one lac twenty one thousand bales of cotton were sold for the year 2021-22 which is nineteen percent more as compared to last week. China was on number one with more than sixty one thousand bales, Vietnam was on number two with more than twenty five thousand bales while India was on third number with more than twelve thousand bales.
For the year 2022-23 more than forty nine thousand bales were sold. El Salvador was on number one with more than twenty eight thousand bales, Honduras was on number second with eleven thousand and four hundred bales while Peru was on number third with more than five thousand bales.
The rates of cotton witnessed an increase in Brazil, Central Asia and especially in India.
Cotton as a cash crop, also known as white gold, is contributing a huge share of over 64 percent in the country’s exports. It is a source of livelihood for millions of people in the region including peasants, rural labourers (male and female), ginning sector workers and labourers in textile sector.
For the last few years, the cotton cultivation area was on decline gradually and thus was creating troubles not only for the rural areas but for the overall economy of the country by lowering the textile’s exports.
Farmers show lack of interest towards cultivation of cotton even in the cotton belt of South Punjab. There were multiple factors for the decline in cotton cultivation area. In 2011-12, the cotton cultivation area was over five million acres in south Punjab. The cultivated area underwent decline mainly due to low profitability, pests attack and shift of farmers’ focus to some other profit-generating crops including maize and sugarcane.
The farmers were facing losses due to continuous pests attack, particularly pink bollworm. Another issue was increasing prices of inputs, and climate changes. In 2020, the cotton cultivation area reduced to 3.168 million acres at provincial level and its production figures reduced to level of production obtained in 1984.
However, due to some concrete measures and sincere efforts on part of the incumbent government, the cotton cultivation area is likely to increase remarkably in the upcoming season. During the ongoing season, the cotton farmers are availing highest ever price, ranging from Rs 6000 to Rs 8500 per 40 kg, depending on quality of cotton. However, in past, the farmers were forced to sell cotton against Rs 2500 per 40 kg. In 2020, the farmers faced loss of billions of rupees because of increased attack of pink bollworm and unseasonable excessive rains.
In year 2021, the then government earmarked minimum support price of Rs 5000/ 40kg in order to ensure reasonable profit for the millions of the farmers. In Punjab, there are nearly 5.2 million farmers and majority of peasants live in rural areas of south Punjab. Cotton is very much important for their economic survival.
Secretary Agriculture South Punjab Saqib Ateel said that Integrated Pest Management (IPM) model was introduced to keep cotton crop safe and secure from attack of pink bollworms. He hinted that the model remained highly successful.
An effort was made to ensure spray of bio-pesticides for elimination of pests. Although there was low cultivation area in the region but per acre production of cotton increased significantly. Similarly, the farmers got handsome price against their produce, stated Ateel, hinting that the farmers were very much keen to bring more area under cultivation for cotton in year 2022. The secretary agriculture hoped that cultivation area would be between four million acres to five million acres in upcoming season in the cotton belt.
Known cotton scientist and Director Cotton Research Institute Dr Sagheer has also hinted that there would be maximum cotton cultivation in the upcoming season. He maintained that high profitability would be the main factor for increase in cultivation area. He hoped that there would be handsome production of cotton in upcoming season. Research bodies are also working hard to guide farmers especially for seed quality, cotton field management, pest control and how to cope with climate change.
Deputy Secretary Agriculture South Punjab Asif Raza said the average production had been reduced to 445 kg per hectare in year 2020. However, the farmer-friendly policies especially support price and application of IPM model have helped in surging average production which jumped to 729 kg per hectare in 2021.
About profitability margin in year 2021, Asif Raza said that Rs1.69 profit was achieved against investment of Rs 1 in cotton. Similarly, he added that that Rs3.63 was earned against investment of Rs 1 at 120 demonstration plots of cotton wherein IMP model was implemented strictly.
Mudabbar Shah, an expert on cotton international marketing, has hoped that there would be maximum sowing of cotton in year 2022. He maintained that the cotton prices at international level would be nearly Rs 10,000/ 40kg and it would encourage farmers to cultivate maximum cotton. Cotton demand is very much high in China and some other countries of the region, said Mudabbar.
Progressive farmer and owner of a private seed company Sajjad Chathha has predicted that cotton cultivation area would increase by 25 percent. The cotton price is extremely good and it will boost farmers’ morale. A very good number of farmers contacted him for cotton seeds, Sajjad informed. He hinted that he himself would enhance cotton cultivation area in the upcoming season. He noted that he would cultivate cotton over 140 acres.
Ameer Hamza, another known farmer, stated that farmers started preparations for maximum cultivation of cotton, keeping high profit margin. He added that the white gold would regain its past glory. He also termed high price of cotton as basic reason which was persuading farmers to bring maximum area under-cultivation
Member of the Core Committee of Pakistan People’s Party (PPP) Senator Taj Haider on Wednesday called for fixation of a reasonable minimum support price for the cotton crop of this Kharif season.
In a statement here, he said that the cotton crop was the backbone of our economy. The textile industry provided ample employment for our peasants and workers at many stages of the production cycle, besides being the major contributor to the country’s exports.
“Our cotton crop which once figured 14 million bales has gone down to 6 million bales due to its low profitability and shifting to other cash crops,” he added.
A reasonable support price like Rs. 8000 plus per maund plus could encourage the farmers to cultivate the crop over more area and to use sufficient and better, the cotton production might jump easily by another 5 million bales.
He urged for price fixation before sowing of cotton crop, otherwise it would not help in increasing the crop area.
Textile industry had been importing large quantities of cotton which also was becoming uneconomical due to the devaluation of Pakistani rupee, he said.
Pakistan needs to drastically cut down its imports. Import substitution of 5 million cotton bales would save us 5 billion dollars in the import bill. Whereas, for just one billion dollars loan from the IMF, Pakistan was being forced to raise fuel prices which would result in an overall increase in our production costs and would further push up the inflation.
Copyright Business Recorder, 2022
Comments
Comments are closed.