Cotton sowing operation is gaining momentum particularly in lower Sindh while in the rest of Sindh and Punjab the growers are in the process of preparing land and making available inputs like seed and fertiliser.
In the top most cotton producing district of Sindh, canal water is available for cotton growing and sowing is in full swing.
However, the present heat spell, which has pushed the temperature to 46 degrees Centigrade in Sanghar and 48 in Nawabshah district, would not help good sowing.
Cotton growers have high sowing intentions and are trying to increase area.
The only factor which can boost our cotton production up to 13.0-14.0 million 170-kg bales is the friendly weather as other factors such as cotton policy, availability of inputs and crop management systems remain unchanged.
Our cotton production has stagnated around 10.0 million local bales against our domestic consumption of around 12.5 million bales.
Actually, government's cotton policies and efforts of concerned organisations, departments and institutions have failed as there has been no breakthrough either in quantity or in quality of cotton in the last more than 10 years.
The government has to re-structure the ministries and concerned departments/institutions and make its working goal/result-oriented. Being basically an agriculture country, agriculture has been grossly neglected and all efforts are being made for boosting industries but we have forgotten that most of our industries are based on agriculture. One cannot make its body strong and healthy without filling its stomach.
In order to largely increase its cotton productivity, India has already adopted the GM (Genetically Modified) technology some two years ago and is now adopting Israel's agronomic technologies, but Pakistan's scientists are neither producing their own technologies nor favouring adoption of foreign technologies. The concerned quarters and intelligence agencies should inquire into the matter whether any conspiracy is working to keep Pakistan economically backward and dependent?
The USA is working hard to boost its cotton exports to prominent cotton consuming countries such as China, India, Pakistan and Indonesia in Asia as in the coming years its annual export surplus would reach the level of 14-15 million bales. Brazil has been negotiating with USA for persuading it to withdraw all its huge subsidies paid to cotton producers but all in vain. As a last resort, Brazil filed a suit with WTO panel against USA last year.
On April 26, the WTO panel in its part decision admitted that liberal subsidy policy of the US is damaging the interests of cotton growers of other countries. final decision is expected on June 18 next. Foreign trade circles think that WTO's decision may go against USA.
The repercussions of the possible decision against USA subsidies to cotton producers may be far-reaching and deep on global agriculture, specially cotton. This possible decision may change the scenario of global cotton production.
Local cotton market has shown some signs of recovery, perhaps on the strength of New York futures market. Yarn in the local market has also improved, somewhat, but interests in cotton buying remain limited and selective.
Spot Rate has been improved to Rs 2,900 per mound ex-gin for Grade 3 staple 1-1/32. Better grade cotton is reported to have fetched as high as Rs 3,100 but other deals were around Rs 2,900-Rs 3,000 for better grade, Rs 2750-Rs 2,850 for average grade, and up to Rs 2,250 per mound for low grade/low mic cottons.
When the prices were weak a couple of weeks ago, some exporters were able to conclude export sales of about 20,000 bales of cotton particularly in low grades.
The ginners are understood to be holding some 700,000-750,000 bales. With the passage of time, cotton buyers will look for the new crop arrivals and chances of cotton recovery in prices after May would minimise.
The ginners should not miss any chance of concluding deals for sale of their cotton.
New York cotton futures staged good recovery in values during last week. May contract went off the board on May 7, while July contract opened at 59.36 cents and closed at 64.75 cents, registering a robust increase of 5.39 cents.
US export sales during the week ended April on 29 were reported at 130,000 Running bales. Up to date export sales were reported at 12.860 million 480-lb bales (Upland 12.392 m and US Pima 0.468 m) while shipments were at 9.439 million bales (Upland 9.022 m and US Pima 0.417 m).
Prominent buyers of US cotton were : China 4.816 million bales, Mexico 1.696, Turkey 1.246, Indonesia 0.821, Korea 0.479. Thailand 0.421, Canada 0.411, Pakistan 0.4054 (including 84,700 bales of US Pima), Japan 0.360, Taiwan 0.314, Brazil 0.302, India 0.199 and Bangladesh 0.168 million bales. USA can easily achieve the export target of 13.4 million bales before the end of the season.
In 1998-99, US sowed cotton on 13.1 million acres which in 2001-2002 increased to 15.5 million acres due to payment of liberal subsidies to cotton producers. Similarly, US share in world exports, which was 17 percent in 1998-99, increased to 42 percent in 2002-03 thanks to increased acreage and reduced domestic cotton consumption.
If Brazil wins its case against USA on payment of high subsidies to cotton producers in WTO panel and the decision is implemented in letter and spirit then global scenario of cotton production and pricing would be changed. Better weather conditions have increased the prospects of cotton production in Australia in 2003-2004 season.
This season, Australia is producing 1.407 million 500-lb bales from 493,000 acres with average yield of 1427 lbs per acre. Ninety-five percent quality of its cotton is reported SM-36.
Quality-wise Australian cotton, among comparable growths of other countries, is the best but is costly in price. The yield is also quite high, perhaps only second highest after Israel.
Vietnam is emerging as the fastest progressing country in Asia. Its average GDP growth rate in the last decade has been reported at 7.4 percent with not less than 4.8 percent in any year. It has re-structured its agriculture policies and has brought drastic changes to gear up the investment and growth.
As such, it has reduced its poverty level from 58 percent in 1993 to 29 percent in 2002. Its exports have staged robust increase of 20 percent in 2003 to $20 billion. As a result of signing of trade pact with USA, it has doubled its exports to USA.
Its textile exports to USA, which stood at only $47 million in 2001, jumped to $2.4 billion in 2003. Vietnam has made tremendous improvement on export front and has achieved the target of $20.0 billion in 2003 while it was only $2.581 billion in 1992.
Against this, Pakistan's exports in 1992 were at $7.351 billion and in 2003 $10.4 billion. Just compare Pakistan's export performance with Vietnam which had been devastated in the lengthy war with USA in the 60s.
Vietnam is coming up in a big way as main competitor of Pakistan in export of textiles and garments. Unless Pakistan improves its cotton production to match its domestic consumption and improves quality of its cotton to international standards, its growth of textile production and exports would remain handicapped.
The WTO regime will be governed by lower prices and better quality of products which require a high degree of performance and efficiency.
Chinese cotton markets are enjoying a week-long holidays and would resume normal business operation on Monday, May 10. Some reports from China state that Chinese Prime Minister has desired to slow down the pace of economic development and keep the growth of GDP around 7 percent, instead of over 9 percent, in the first quarter of this year.
Chinese economy is reported to have been overheated and it has to be cooled down to match other factors. In China, power shortage is there which would be overcome in the next decade.
Necessary measures are being taken in China to control over-investment and easy flow of money. As such, China is consolidating its progress, specially in industrial and commercial sectors and is trying to keep pace with other sectors.