Following the imposition of 10 percent regulatory duty on imports of cotton yarn and lower cotton production estimates, cotton prices are likely to strengthen in the domestic market. Cotton Ginners Forum Chairman Ihsan-ul-Haq said cotton seed (Phutti) arrival in ginning factories increased significantly during the first fortnight of October 2015 compared to last fortnight of September, in which arrival was suspended for one week due to Eid-ul-Azha holidays.
During the first two weeks of this month some 1.5 million cotton bales were produced compared to 1.2 million bales in last fortnight of September 2015, depicting an increase of 0.318 million bales, he added. Haq said cotton sowing in cotton zones of the country has decreased that forced the federal government to revise targets of cotton production from earlier 15.5 million bales to 13.38 million bales for this season 2015-16. However, he said the actual picture will be cleared after issuance of next cotton production report to be issued by Pakistan Cotton Ginners Association (PCGA) on November 3, 2015. He said that domestic cotton prices are likely to further strengthen in coming days as the production is being estimated short and the federal government has imposed 10 percent regulatory duty on import of cotton yarn from India.
However, he revealed that, some leading textile groups have started efforts to artificially lower the cotton prices on the basis of unexpected increase in arrival of Phutti in first fortnight of October 2015. Textile millers are trying to purchase cotton at cheaper rates to get more benefit, he added.
"Apprehensions of low production has already prompted rise in prices of cotton during last one month and cotton prices reached seasons' highest level of Rs 5,700 per maund, up by Rs 900 per maund. In addition, Phutti prices increased by Rs 500-600 to Rs 3,350 per 40-kg at the end of last month," he maintained. Presently, with a decline of Rs 100 per maund, cotton prices stood at Rs 5,600 per maund in the domestic market, he added.
Haq hoped that cotton market is expected to strengthen after Ashura holidays. Talking about lower production, he said that definitely less than estimates production will increase the prices in the domestic market and directly benefit the growers. He called for spending more on research and development to enhance per acre cotton production. Despite being the world's fourth largest cotton producer, our per acre production is less than India and China, therefore concrete efforts are needed to increase production, he added.
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