KARACHI: Pakistan Cotton Ginners Association (PCGA) has predicted an alarming 60 percent decline in cotton production, which has sparked fears of a new crisis for industrial and agricultural sectors. Total production is expected to be around 60 lac bales, and approximately 60 lac bales will be imported.
However, cotton prices remained stable after fluctuations. Improved supply and quality of cotton led to increased interest from textile mills.
Patron in chief of Exporters Association of Pakistan Khuram Mukhtar has said that business volume has improved. There is 15% increase in textile exports.
Government has assured an All Pakistan Textile Mills Association (APTMA) delegation of reduced electricity prices.
Pakistan Cotton Ginners Association’s newly elected Chairman Dr Jassu Mal Limani has announced allocation of Rs. 1 billion for cotton crop restoration.
However, October 7 will be observed as a World Cotton Day globally in all cotton-producing countries.
The local cotton market witnessed stable prices last week due to an increase in cotton supply. Improved quality of second picking cotton in Sindh province led to increased buying from textile spinners, resulting in higher business volume.
Arrivals of cotton in Sindh and Punjab’s cotton-producing areas have increased, boosting market activity and leading to a price increase of Rs 300-400 per maund.
However, growing global tensions, particularly Iran’s involvement in conflict, have heightened uncertainty. Fears of escalating war have made the business community cautious, posing potential negative impacts.
Elections for prominent cotton associations including All Pakistan Textile Mills Association (APTMA), Pakistan Cotton Ginners Association (PCGA) and Karachi Cotton Association (KCA) have taken place. New leadership has pledged to take measures for cotton crop restoration.
Dr Jassu Mal Limani, newly elected Chairman of PCGA, has announced allocation of Rs. 1 billion for cotton crop restoration.
However, October 7 marks the World Cotton Day, observed globally in cotton-producing countries. Pakistan’s cotton industry, including relevant associations, is participating in this international event.
The rate of cotton in Sindh remained in between Rs 18,000 to 18,300 per maund. The rate of Phutti is in between Rs 7,400 to Rs 8,400 per 40 kg:
The rate of cotton in Punjab is in between Rs18,200 to 18,500 per maund. The rate of Phutti is in between Rs 7,200 to 8,500 per 40 kg. The rate of cotton in Balochistan is in between Rs 18,100 to 18,300 per maund and the rate of Phutti per 40 kg is in between Rs 7,400 to 8,800.
Karachi Cotton Association’s Spot Rate Committee has maintained the spot rate at Rs 18,000 per maund.
Chairman of Karachi Cotton Brokers Forum, Naseem Usman stated that international cotton prices remained stable overall. New York cotton futures traded between 72-74 US cents per pound.
According to USDA’s weekly export and sales report for crop year 2024-25 95,800 bales were sold. Vietnam topped the list with 29,100 bales. Pakistan secured the second position with 25,400 bales and Peru ranked the third with 14,000 bales.
For crop year 2025-26, 39,600 bales sold. Malaysia emerged as the sole buyer
The federal government has assured the trader community that electricity prices will be reduced within a month. This development came after a meeting between the Minister of State for Finance, Ali Pervez Malik, and a delegation of traders led by Kamran Arshad, Chairman of APTMA.
During the meeting, the APTMA delegation briefed the Minister on the issues faced by the textile sector and presented proposals to increase domestic exports. Kamran Arshad later told the media that the textile sector is struggling with high electricity costs. Asif Inam, former Chairman of APTMA, claimed that the Minister assured the delegation of reducing electricity prices within a month, which would also be a result of negotiations with IPPs.
This move is expected to provide relief to the textile industry, which has been facing significant challenges due to high energy costs. The reduction in electricity prices would help boost the competitiveness of Pakistani textile exports in the global market.
Pakistan’s textile exports increased by 15% in August, but exporters still face financial constraints and tax issues. These issues if resolved can boost exports by 25%, said Khurram Mukhtar, Chairman of Pakistan Textile Exporters Association.
He highlighted that exporters struggle with double income tax payments, GST complexities, and delayed refunds, resulting in stuck capital and additional financial burdens. He emphasised that unresolved sales tax refunds of Rs 55 billion and duty drawback refunds of Rs 25 billion since August 15 have exacerbated difficulties. The Export Facilitation Scheme’s termination on local buying has further complicated the situation.
After wheat, rice, corn, mustard, mangoes, kino, and sesame, farmers now seem to be deprived of decent income from cotton yield per acre, as well. Farmers’ organisations are demanding that federal and provincial governments take emergency measures to revive the agricultural sector.
The Pakistan Cotton Ginners Association (PCGA) has released its latest cotton statistics, revealing a substantial decline in production.
As of October 1, 2024, total cotton arrivals stand at 2,039,963 bales, compared to 5,025,282 bales recorded on the same date last year—a sharp decrease of 59.4%.
Punjab reported a production of 726,767 bales this year, down 65% from last year’s 2,069,433 bales. Sindh saw a decline of 56%, with 1,313,196 bales produced compared to 2,955,849 bales in 2023. Balochistan produced 58,133 bales, with the highest yield coming from Sanghar district, which recorded 851,798 bales.
This year’s production target was set at 10.8 million bales. However, based on current data, it appears unlikely that the target will be met, with projected yields estimated at only 6.5 million bales, or 39.8% of the goal.
Analysts attribute the rise in unregistered bales to the absence of a track-and-trace system and the imposition of various taxes on the industry.
The decline in domestic cotton production has led textile mill owners to enter into agreements to import 3 million bales, with further imports expected. The majority of these agreements have been made with the United States, and the total value of imported cotton has surpassed $2 billion.
Several factors contributed to this year’s reduced production. One of the key reasons was the delay in early sowing, which ideally takes place between February 15 and March 31, with night time temperatures no lower than 15°C. However, February 2024 saw an average temperature of 9.4°C, indicating colder-than-usual conditions. This cold weather affected cotton crops, causing seedling diseases, including fungal infections. Low night time temperatures persisted through March, further delaying sowing and impacting potential yields.
Moreover, the extreme heat experienced in May and June, with temperatures reaching 48°C, caused the flowers and fruit on cotton plants to drop, significantly reducing yield. Cotton plants experience stunted growth when temperatures fall below 15°C, and seedlings begin to perish. Optimal growth conditions require a soil temperature of at least 20°C. Thus, the combination of unusually cold temperatures in February and March, followed by intense heat in May and June, severely impacted the crop.
The situation was exacerbated by heavy monsoon rains and flooding, which caused additional damage to the cotton fields. Pests such as whiteflies and pink bollworms also inflicted significant losses. Similar to the previous year, the absence of an announced support price for cotton led to a reduction in the area under cultivation.
In Punjab, the target for cotton cultivation was set at 4.3 million acres, but only 3.2 million acres were sown. In Sindh, the target was 1.6 million acres, but actual cultivation slightly exceeded 1.5 million acres.
Further challenges included the rising costs of fertilizers, pesticides, electricity, and diesel, which hindered small farmers from managing their crops effectively. To improve cotton production, it is essential to set a support price of Rs. 10,000 per maund.
Additionally, the absence of climate-resilient, high-yielding cotton varieties is the result of years of neglect in research and development. Pakistan’s largest cotton research body, the Pakistan Central Cotton Committee, is currently facing a severe financial crisis, which demands urgent attention from the government.
Copyright Business Recorder, 2024