Except for some stray/localised reports of pest attack and somewhat broader reports of flower-shedding in a couple of districts of lower Sindh, the cotton crop is understood to be progressing well, and harvesting is also gaining momentum. Reports from Punjab indicate that the crop is developing well to harvest a bumper crop of 11.0 to 11.5 million bales.
However, the month of September, which is jokingly called in local language as 'Sitamger' (meaning tyrant) month, has started.
The possibilities of heavy rains have almost gone but that of pest attack are there. The growers, relevant government agencies and pest controlling companies should stand alert all the time to fight against likely pest attacks/diseases for securing a bumper cotton crop. Currently, the size of our cotton crop is estimated around 13.5 million bales.
Southern winds, which are locally called 'Dakhan Winds' are blowing which are considered quite beneficial for reducing pest attack. However, we have to wait till October 15 to get a comparatively reliable picture of crop estimates.
One ginner said that in spite of pest attack reports and normal arrivals, lint cotton prices have crashed to the level of Rs 2,050 per maund (37.324 kg) ex-gin, and seed-cotton prices around Rs 900per 40 kg in Sindh, while in Punjab the prices are somewhat higher. Cottonseed in Sanghar is said to be selling around Rs 350-360 per 40 kg. While some mills are running hand-to-mouth, prominent spinner groups are active in buying lint cotton from Sindh.
The abrupt drop in local lint prices has prompted some import inquiries from some traditional buyers of Pakistan cotton, especially Bangladesh and Indonesia. But price agreement may be difficult above the parity of Rs 2,000 per maund ex-gin. Mostly, the ginners are working on the policy of keeping zero stock of lint cotton and some are making forward sales. However, the exporters would enter the market at the level of Rs 2,000 and below.
According to some press reports, the government has allowed Trading Corporation of Pakistan (TCP) to procure 100,000 bales of contamination-free cotton from ginners, which would be sold to local spinning mills. One press report says: "The government has decided to hire multinational companies for marking of grade and staple on each bale of cotton to obtain contamination-free cotton from growers and ginning factories as part of clean cotton programme." What one understands from this report is that contamination-free cotton can be obtained by marking Grade and Staple on each bale of lint cotton.
From the press briefings and conferences of high-ups, one gathers that these high-ups are perhaps of the view that contamination-free cotton is some sort of cotton variety which comes from the field. Internationally, cotton is bought and sold on the basis of four factors: Grade, (Colour, Trash and Preparation); Staple length; Micronaire; and Strength.
And each factor has its standards. It is next to impossible to produce, or obtain, lint cotton in commercial amount strictly or absolutely free from any contamination. Even the best grade cotton would have some amount of trash (leaves only) and some ginning trash.
Generally, contamination means extraneous matter, and it has been defined as "Any substance in cotton other than fibre or leaf such as bark, grass, spindle twist, seed-cotton fragments, dust, oil, piece of twine, jute yarn, plastic wrapper, and metal etc." These extraneous substances get mixed with the cotton during handling of cotton--right from picking to packaging.
Only by improving cotton handling methods and practices, the amount of such extraneous matter can either drastically be reduced or eliminated. The best grade cotton will have no less than 1 percent trash and average cotton has around 3 percent trash. But, Pakistan's average grade cotton has trash from 7 to 8 percent.
If we improve our handling practices and ginning operations to produce lint cotton with 3 percent trash, the value of our lint cotton would be enhanced by 3 to 4 cents per pound. Some years ago, the government had spent huge amount of money on a media campaign against cotton contamination, and had issued necessary instructions, banning the use of hessian cloth, propylene bags and twine in transporting or storage of cotton. As a result of this, some amount of such matters had been reduced. But the grade of cotton did not improve. The problem of presence of contamination or extraneous matters in our cotton cannot be solved unless the present system of handling cotton, at all stages, is drastically changed.
For reducing the amount of trash from cotton, the Cotton Standardisation System has to be applied on all cotton at ginning factory level, for which the President had promulgated an Ordinance in November, 2002, which was to take effect immediately. But nothing has been done in this direction as yet. There are two problems in our cotton: one is the presence of high amount of trash (leaves) in our ginned cotton; and the other is presence of extraneous/contamination substances in the cotton.
By applying Cotton Standardisation System, based on Cotton Grading on all cotton at the ginning stage, the amount of trash can be reduced to world standard, while by changing the present cotton handling system and storage, right from picking to storing of cotton bales, we can reduce to a greater extent, or eliminate, the extraneous/contamination substances from cotton. The most important matter is reducing of trash amount from cotton by applying Cotton Standardisation System, so as the value of our lint cotton may be enhanced. Internationally, lint cotton is traded on the basis of Standards of Grade (trash percentage), and not on the basis of any so called standards of extraneous matters.
Cotton prices in the local market have lost ground to the extent of Rs 250-300 per maund from peak lint cotton rates of the season. On close of outgoing season, some cotton bargains were also concluded at as low price as Rs 2,025 per maund ex-gin in Mirpur Khas area, while cotton from other new stations such as Shahdadpur, Sanghar and Khipro was sold around Rs 2,050-2,100.
Cotton from Punjab stations was sold at Rs 2,225-2,275 per maund ex-gin. The reason for this decrease in prices is said to be due to increase in cotton arrivals, loss in ginning operations and holding of lint cotton.
TCP is holding unsold stock of about half a million bales, which may be offered for export. This does not mean that in the peak arrival months of October and November lint cotton prices may lose another Rs 200/300 to touch the level of Rs 1700/1800. Unless TCP enters the market, prices are likely to float around Rs 2,000 level.
On the reports of loss/damage to cotton crop due to Katrina in USA, the fall in NY Future values has been arrested.
The continued weakness in yarn and textile product prices is keeping lint cotton prices depressed. Disputes on increasing Chinese exports of textile goods to USA and European Union are also hampering cotton prices. The short trend of cotton prices is reported to be weak while in the long term, the prices may improve.