Cotton arrivals up 1.1pc in fortnight, imports forecast at 4.2 million bales

LAHORE: The cotton production showed little growth in the fortnight ending Jan. 31, as arrivals at ginning factories reached 8.35 million bales, up 1.1 percent from the previous fortnight, data from the Pakistan Cotton Ginner’s Association (PCGA) showed on Saturday.

The figure was 75.3 percent higher than the 4.764 million bales recorded in the same period a year ago, when the crop was hit by flash floods and rains, especially in Sindh and Balochistan provinces.

Both Punjab and Sindh contributed the same quantity to the total production of cotton in the country, as per PCGA data. Until January 31, 2024, cotton arrival in Punjab rose to 4.238 million bales as compared to 4.159 million bales reported on January 15, 2024. It represented an increase of 1.9 percent month-on-month. On a yearly basis, cotton arrivals in Punjab surged by 46.5 percent compared to 2.893 million bales recorded during the same period last year.

Sindh showed a neck and neck contribution to the national cotton output. Arrivals in Sindh reached 4.111 million bales compared to 4.10 million bales registered on January 15, 2024, reflecting an increase of 0.011 million bales or 0.3 percent. However, cotton arrivals jumped by 119.8 percent year-on-year compared to 1.871 million bales registered in the corresponding period last year.

The overall increase in cotton production in the country has been considered a good omen for the textile industry although the quantum produced is still short of domestic requirement by at least four million bales.

As per the district-wise breakdown of Punjab province, cotton arrival in Multan was recorded at 0.066 million bales, 0.094 million bales in Lodhran, 0.217 million bales in Khanewal, 0.080 million bales in Muzaffar Garh, 0.368 million bales in Dera Ghazi Khan 0.031 million bales in Rajanpur,0.227 million bales in Layyah, 0.218 million bales in Vehari, 0.198 million bales in Sahiwal, 0.005 million bales in Pakpattan, 0.098 million bales in Toba Tek Singh, 0.026 million bales in Faisalabad, 0.020 million bales in Jhang, 0.202 million bales in Mianwali, 0.035 million bales in Bhakkar, 0.618 million bales in Rahim Yar Khan, 0.569 million bales in Bahawalpur and 1.147 million bales in Bahawalnagar District.

According to the Sindh province data, cotton arrival in Hyderabad was 0.230 million bales, 0.135 million bales in Mirpur Khas (Tharparkar), 1.694 million bales in Sanghar, 0.178 million bales in Nawabshah, 0.320 million bales in Naushero Feroze, 0.358 million bales in Khairpur, 0.277 million bales in Ghotki, 0.548 million bales in Sukkur, 0.106 million bales in Dadu, 0.063 million bales in Jamshoro, 0.008 million bales in Badeen. PCGA reported the arrival of 0.187 million bales of cotton at ginning stage in Baluchistan province. According to an estimate, the 2023-24 import forecast stands at 4.2 million bales, which is just slightly lower than last year. The significant increase in domestic production over last year is lowering import demand. The Pakistan Bureau of Statistics reports that July-October 2023 total textile products exports decreased 6.3 percent compared to the same quarter in 2022. However, raw cotton and yarn exports grew 137 and 43 percent, respectively, and China was the major yarn buyer.

As far as cotton prices are concerned, the government set the cotton support price at Rs8,700 per 40 kg for 2023-2024. Due to the relatively good local crop, prevailing market prices dropped below the support price. During the month of October, seed cotton prices in Sindh were between 6,800-7,100 and prices in Punjab were around Rs7,300 during most of the season. While the government has no mechanism to intervene and purchase at the support price, they have been encouraging ginners to purchase at the Rs8,700 level. Nonetheless, most transactions have been at well below that level.