With just about 250,000 unsold bales left unsold with the ginners, lint prices are keeping a tighter disposition with hardly a hint for any bearish inclination. Traders see scant chance of any reduction in domestic lint prices because the bulk of the cotton from the current season (2009-2010) has been sold off.
New crop (2010-2011) plantations are no doubt early but with improvement reported from yarn and fabric sectors, any early arrivals of forthcoming crop will be gobbled up by the spinners swiftly. Some very positive news from the political front such as the consensus developed on the 18th Amendment Bill to the constitution of Pakistan by the leading political parties and the agreement on naming the North West Frontier Province (NWFP) as Khyber-Pukhtoonkhawa are milestone developments indicating improvement in the political development of Pakistan. These events promise to instill new confidence in traders, industry and the people at large.
Though the general price range of lint in both Sindh and Punjab was said to be between Rs 5200 to Rs 5500 per maund (37.32 Kgs), several ginners refused to release their stocks at these prices and were quoting Rs 5525, Rs 5550 and even Rs 5600 for a maund of their cotton. Seedcotton (Kapas/Phutti) from the current crop (2009-2010) has all but dried out but its nominal price was reported to be ranging from Rs 2100 to Rs 2200 for 40 Kgs as per its quality.
New crop (2010-2011) sowing has started in Badin, Mirpurkhas district and Sanghar in Sindh, while in the Punjab the growers have started planting the new crop in Kasur, Sahiwal, Pakpattan and Okara. Due to much higher demand for cotton which could increase mills consumption to about 16 million domestic size bales for the incoming season (August 2010-July 2011), growers are opting to plant cotton very enthusiastically.
According to one assessment the carryover of cotton from the previous season (2008-2010) was around 400,000 local size bales, while the output this season on an ex-gin basis is 12.7 million bales. Mills consumption during this year is estimated at 15.3 million bales and exporters will have shipped 800,000 bales. Thus the spinners in Pakistan will import about 3 million bales (170 Kgs) for the entire current season.
Spinners in Pakistan are hopeful that new crop (2010-2011) cotton arrivals in Pakistan could commence as early as June, 2010. Furthermore, the spinners are conjecturing the next cotton crop (2010-2011) in Pakistan will produce around 14 million domestic size bales because the acreage in cotton may increase by ten percent subject to clement weather. Snowfall and rains in northern areas Pakistan will provide better water availability to the growers. Furthermore, if yarn off-take and viability maintain their current encouraging levels, mills consumption should rise to 16 million domestic size bales next year.
Cotton growers and the trade were extremely pleased that the Punjab government finally crossed the Rubicon last Wednesday and allowed nine varieties of BT (Bacillus Thuringiensis) cotton to be sown from the next crop (2010-2011) at a meeting of the Punjab Seed Council. The marathon meeting was held under the chairmanship of Ahmad Ali Aulakh, the Punjab minister for Agriculture. This important step ushers Pakistan into the sophisticated field of biotechnology and opens up tremendous opportunities to multiply cotton output, reduce inputs for the cultivation of cotton by developing transgenic plants which resist certain pests and should also resist biotic stresses like drought, heat and salinity. Scientists should also look towards the improvement of quality of proteins and oil through genetic engineering.
The benefits of BT cottons include resistance to bollworms, reduced input of insecticides and also assist in creating eco-friendly environment without reducing the crop production. However, Pakistani scientists will have to pursue further research to considerably reduce the micronaire readings of the BT cotton and improve characteristics like staple length, strength and maturity. Moreover, the provincial and federal agricultural ministers should formulate plans to regulate the orderly propagation, sale and monitoring of the growth and development of BT cottons in Pakistan. Punjab government has already taken a historical step in encouraging the scientific development of BT cottons in Pakistan, now it must assist with the orderly increase in the use of BT seeds and control its purity and distribution so as to protect the farmers.
Trade circles divulged that in the 39th meeting of the Punjab Seed Council held on the 31st of March 2010, out of the eleven candidate BT cotton varieties and hybrids, three varieties were passed unconditionally, six varieties were passed conditionally for one year, while decisions on two varieties of BT cotton were deferred. Both the private and public sector organisations have been working hard on the development of BT cottons for the past several years. The BT seed developers and growers are jubilant that the government has given the permission for the first time to grow BT cottons from locally developed seeds.
On the global economic and financial front, equity markets showed steady performance and even some improvement, but outlook again became cautionary after the middle of the week. It appeared that European, American, German and Japanese markets are constantly itching to show improvement, but some negative news or the other again tempers their rise.
The Greek malady continues to remain fundamentally disturbing and the serious problems of sovereign debts in Ireland, Portugal and Spain continue to haunt. Now Italy also looks vulnerable and may soon be posting some dismal economic news. The emerging global economic scenario seems to portray healthy resurgence in Asian economies, while most of the European, American and other Western economies remain basically in the doldrums.
The Japanese economy showed a modicum of improvement but remains basically fragile. According to French president Nicholas Sarkozy, there is no global financial structure to regulate or reform the worlds banking system. Thus any apparent recovery in the Western world would be fractious and illusory. It thus seems that the downturn in the global economies may be reaching the end of the tether with no real or tangible resue plans in hand.