By the 15th of this February month, total national seed-cotton arrivals are estimated around 11.0 million running bales equivalent which confirms our earlier season's crop estimates between 11.0 and 11.5 million bales. Last year, Pakistan produced 11.334 million running bales.
Reports from upcountry reports indicate that like last year, cotton sowing process is taking start quite early in this month in Central Punjab. Last year, some 600,000 bales were produced there earlier than start of the normal ginning season and this season the growers plan to increase it to 1.0 to 1.5 million bales. The reason for this is growers of such early crop had received a fantastic price up to Rs 2.200 per 40 Kg ex-gin. As such, seed-cotton arrivals may start in Punjab in early July but this time the growers may get much lesser price than that of last year's in view of poor global and domestic financial and economic conditions in the country.
The efforts of the government towards introduction of Bt. Cotton-seed to increase cotton productivity and production may take a couple of years in producing some results. India has extended sowing of Bt. Hybrid cotton to 80 percent of its total cotton area of some 9.4 million hectares and has doubled its production from 15.75 to 31.5 million 170-Kg bales in last six years. Pakistan should increase its production to 20 million 170-Kg bales by 2015 to meet its domestic requirements on one hand and make available some 1.5-2.0 million bales for exports.
The target is not over-ambitious as in 2004-05, Pakistan had already produced 14.3 million bales. The existing working spinning capacity can consume 16.0 million bales, which may be enhanced to 18-18.5 million bales. For this, sincere efforts and a pragmatic scientific approach to the problems is required to be made.
Lint cotton process in the local market remained steady between Rs 3,200 to 3,400 per maund ex-gin with same weakness in the end of the last week on drifting down of world crude oil prices from 40 to US $36 per barrel in New York market coupled with weakness in New York cotton prices which have decreased last week by 10.4 percent to Cts 45.03/lb. As prices of foreign growths particularly of Indian Shanker-6 has been reduced to US Cents 54.0-55.0 /lb, f.o.b Mumbai / Kandla, export parity of Pakistan's cotton has lost its viability. Local spinners who have already received shipment of some 1.2 million 170-Kg bales equivalent are evincing interest in Indian and US growths.
In view of reduction of world cotton consumption by 8.3 percent to from last season, the cotton surplus countries are much worried about disposal of their surplus cotton. African countries who are also surplus in cotton have evinced great interest in making direct contact with the spinners / buyers of Bangladesh and a delegation of 21 cotton people has already visited Bangladesh in this regard. Bangladesh is regarded as third largest cotton importing country with over 3.0 million bales a year and also third largest manufacturer of cloth in the world. Bangladesh earns a handsome amount of annual foreign exchange of US $11.0 millions from export of apparels.
China has become free of quota-restrictions from US and EU countries from January,09 and will have more export potential. Global recession is also affecting China. In Jan,09, China's export reduced by 17.5 percent and imports by 43.0 percent creating a huge trade surplus of US $39.1 billions in a month, the third largest one China's history. China's trade surplus with US stood at US $12.3 billions in this January month. In last November, China made a stimulus plan to pump some US $586 billions into their economy with a view to broaden the domestic consumer spending base and to reduce dependence on exports. It is quite interesting to note that up to 50 percent of China's annual imports of US $1000 billions comprise of different raw materials which is used in manufacturing of export goods.
The US may reduce its cotton area to 25 years low at 8.1 million acres next season. This season, world consumption has been assessed at 112.63 million bales in February,09, down by 8.7 percent from last years level of 123.4 million bales; highest year to year decrease since 1937-38. USA's domestic mill-use has come down from record high at 11.349 million bales in 1997-8 to estimated 3.9 million 480-lb bales in this season. The other day, US has approved a stimulus plan of US $787 billions to support their economy. The tricking down affects of this global financial and economic recession are still going on the economy of US and EU countries. This recession had started from US and its end would also start from US while in Asian countries it reached later and would end in the end.
Pakistan has already come in the grip of global economic depression, which would affect its economy and the people adversely at least up to next year. The economic conditions would deteriorate further to the extent that every body would feel not only its pinch but punch.