According to circles close to the Karachi Cotton Association (KCA), chances of reaping a wholesome cotton crop (2008-2009) have become very promising so that output during the current season may be as high as 13 million or even 14 million domestic size bales.
Knowledgeable sources said in Karachi recently that the Agricultural Development Commissioner, Government of Pakistan, Dr Qadir Bux Baluch, recently told the Chairman KCA, Mian Iqbal Umer, that due to adequate efforts made by the government to eradicate the mealy bug menace from the standing cotton crop, possibilities of a much higher production have risen sharply.
Sources added that vigilance and timely steps taken by the agricultural experts, such as introducing predators in the cotton fields, most presence of mealy bug has been wiped off. As a second line of Defence, mineral oil has been imported from Egypt for application to cotton fields to ward off any residual presence of the mealy bug where necessary.
Furthermore, recent floods in the rivers may have damaged upto 300,000 bales of cotton but this quantity is likely to be made up due to better showing in other parts of the cotton belt. This anticipated recovery in cotton output during the current season (2008-2009) should be a big boon to the entire cotton economy of Pakistan from the growers and ginners up to the textile manufacturers and garment producers which should add up to a significant improvement in the overall economy of Pakistan.
Cotton trade and the textile industry should be delighted at this development as not only the import of expensive cotton will decrease but even the cost of production of several of the beleaguered units of the textile industry in Pakistan would also be reduced.
Cotton prices over the past few weeks have been essentially vacillating between Rs 4,100 and Rs 4,200 per maund (37.32 kgs) with an occasional spike here and there. Brokers variously said on Thursday that lint prices remained mostly unchanged to steady. The quality of Sindh styles arriving now was said to be good but grades of Punjab varieties are still on the lower side.
A notable feature of the market concerns the presence of exporters since the last couple of days. With clearing of the weather for the time being and advance of the current season (2008-2009), cotton arrivals should pick up materially. Recent transactions in the ready market indicate that daily trade of cotton has increased appreciably as supplies are also being augmented.
A big drag in expeditious pick up of cotton could be due to high prevailing bank mark-up rates coupled with anti-inflationary measures being put in place by the State Bank of Pakistan, the federal bank, to curb inflation.
With passage of time and increased arrivals of seedcotton, it would have brought down lint prices, but due to smaller carryover of cotton from the previous season (2007-2008) to the current season (2008-2009) and overall strength of the United States dollar against the Pakistani rupee, lint prices may not go down much in local currency units. Moreover, the cost of inputs to the growers to plant and propagate cotton has also gone up considerably.
Generally speaking, the seedcotton (kapas/phutti) prices in Sindh reportedly ranged from Rs 1,850 to Rs 1,900 per 40 kgs, while in Punjab they are said to have ranged from Rs 1,800 to Rs 1,950 per 40 kilogrammes. Lint prices on Thursday are generally said to have ranged from Rs 4,100 to Rs 4,150 per maund (37.32 kgs) in Sindh, while in the Punjab they are said to have ranged from Rs 4,075 to Rs 4,100 per maund according to the quality.
Cottonseed (kakra/binola) prices in Sindh reportedly ranged from Rs 720 to Rs 740 per maund (37.32 kgs) while in the Punjab they are said to have ranged from Rs 720 to Rs 730 per maund. In ready sales on Thursday, 1,000 bales of cotton from Hyderabad and 2,000 bales each from Shahdadpur and Tando Adam all reportedly sold at Rs 4,125 per maund.
Later, 400 bales from Shahdadpur also sold at Rs 4,150 per maund. In Punjab, 400 bales from Bahawalnagar and 600 bales from Arifwalla both sold at Rs 4,075 per maund, while 200 bales from Gojra and 400 bales from Chichawatni both sold at Rs 4,100 per maund. Buying interest appeared more pronounced in the evening.
Political wrangling continues unabated in Pakistan with main features being the fallout pertaining to the recent resignation of President Pervez Musharraf (18th of August 2008), imbroglio concerning restitution or otherwise of deposed Chief Justice Iftikhar Mohammad Chaudhary and other judges and now the candidacy declared by Co-chairman Asaf Ali Zardari of the Pakistan People's Party (PPP) for the office of President of Pakistan.
These activities have not only brought polarisation in Pakistan with separatist threats and fissiparous tendencies apparent in the smaller provinces of Pakistan such as Balochistan and the North West Frontier Province (NWFP), but increasing inroads being made by the Taliban are dampening business activities in the country. Loadshedding and increasing absence of power supply has also frustrated business and industrial activity to a considerable extent concerning which both big and small textile industries are complaining regularly.
Moreover, the All Pakistan Textile Mills Association (Aptma) recently appealed to the government asking for a separate power tariff because it claimed that the textile industry, being a large consumer, is being unnecessarily burdened because of line losses during power transmission and inefficiencies and malpractices of the systems relating to other consumers which are being wrongly passed on to the textile industry who remain good paymasters.
Aptma fears that if power is not supplied to its units on equitable and economical basis, it could face more closures and shutdowns leading to further decrease in employment, foreign exchange earnings and decrease in tax collections.