Reports of rains in some cotton areas of Sindh and Punjab continued to pour in last week also but the intensity and extensity remained restricted. Met office forecast further rains in Sindh this week. During my last visit to a few cotton districts in Sindh, cotton plants appeared quite bushy and flowery.
Also a lot of herbs and weeds were seen on the ridges and lines. This was the effect of recent rains. The plants also appeared to be gaining height. Plant development process has accelerated and maturing process has retarded. As such, cotton harvesting is likely to be delayed by two to three weeks. The entry of cotton pickers in the fields to start picking operation at this stage may result in flower shedding.
Cotton plant development stages such as flowering, squaring, boll formation, boll opening and picking go from down to upward. First of all, cotton bolls of the lower part of the plant mature, then of the middle, and finally of the upper part of the plant. When bolls on the bottom open, there may be squaring and boll formation on the middle part and flowering stage on the upper part of the plant.
At present, the crop is passing through a tense and difficult stage of development. Reports of pest attacks are there but these are generally of localised nature. However, any lapse or delay in tackling pest control measures may cost much. As such, growers, concerned government agencies and pest management/control companies should remain alert to meet any emergencies/exigencies to save the cotton crop which is presently assessed around 13.0 to 13.5 million bales.
Recently, there have been very heavy monsoon rains in Gujarat and Andhra Pradesh states of India, resulting in floods and some loss to cotton crop. The Rita storm in Texas and New Orleans in the USA has caused heavy damage to property and lives. Texas is a prominent cotton producing state of USA and the loss to cotton is being assessed. Three out of four top-most cotton producing countries of the world are facing problems both quantitatively and qualitatively. However, it may take two to three weeks for ascertaining the size of cotton crops.
Local cotton market remained steady to firm during last week on reports of rains in a few cotton areas and of entry of Trading Corporation of Pakistan into the cotton market to stabilise seed-cotton prices at the level of Rs 975 per 40 kg ex-gin, and lint prices at Rs 2,169 per maund (37.324 kg) ex-gin. Even if the Economic Coordination Committee of the Cabinet approves TCP''s cotton procurement programme, it may take four to five weeks to practically commence procurement operation. Like last year, the TCP would have quantity and quality restrictions in lint cotton procurement which would benefit the ginners more than growers. The Government should work on alternate ways to ensure proper return to cotton growers. Last year''s procurement and disposal operations were found well below the desired level.
TCP should have a cotton section, manned by experienced and well-reputed professionals, which should handle all cotton matters exclusively rather than involving all TCP people unnecessarily. Last year, about a million cotton bales were stored in Pipri warehouses but hardly 10-15 people were deputed and those also mostly inexperienced. Same was the situation in Korangi warehouses. The result was a mess in handling and storing cotton bales.
For the first time in the history of Pakistan, bale by bale weighing of cotton was not conducted, and container weight was allowed because TCP failed to make available adequate labour for handling the bales. The TCP has re-floated its tender for export sale of 50,000 bales. This time, the minimum quantity has been reduced from 5,000 bales to 2,000 bales with multiple of 500 bales to attract a larger bidders'' participation.
The present level of lint cotton prices is between Rs 2,150 and Rs 2,225 per maund, and indications to this effect appear quite positive. However, New York cotton advice would be the guiding factor in determining the prices. The continued weak position of yarn market is the main hindrance in up-keep of cotton prices. Trade circles think TCP may get best bid around the level of 44-45/lb cents FOB Karachi.
As seed-cotton arrivals get accelerated on improved weather conditions, cotton prices may decrease by Rs 50-100 in a week''s time as the spinners do not find any yarn price viability at the present level of lint prices, beside being hard pressed by high inventory of unsold yarn.
The dead lock in the talks between USA and China over Chinese textile exports to USA is extending and US is taking safety measures to protect its textile industry. EU countries have also some problems with China over Chinese textile imports into EU countries. Unless the reservations and problems in the way of smooth foreign textile trade are addressed, cotton and yarn markets here may continue to remain slack.