Cotton production feared to remain short of 2.5 million bales

KARACHI: Pakistan is likely to face a shortage of around 2.5 million cotton bales during current year as the sowing this year remained 25 percent lower than the last year.

Girdhari Lal of Pakistan Cotton Ginners Association said the cotton sowing declined significantly and the production would be quite short of the demand.

“Country’s cotton demand hovers around 14 million bales while the production is estimated at a little above 11 million bales. According to our estimates, around 2.5 million bales would need to be imported,” Girdhari Lal said.

As many as 125 ginning factories out of total 275 have started operating in Sindh while just 60 factories out of 900 are operational in the Punjab as cotton seed (phutti) arrival has not started as yet.

Taqi Abbas a cotton dealer said proper supply of cotton seed (phutti) would kick off by mid-September, which would increase the supply.

“The cotton prices are unjustifiably high at the moment because of supply shortage. Once the ginning mills gain momentum, prices of the commodity would ease,” Abbas said.

Taqi said there was a severe demand and supply situation at the moment because of the rains in Sindh and the Punjab.

“The crop in the Punjab is late in Sindh, rains have impacted the quality, which has put ginners in a fix,” Abbas added.

Meanwhile, textile manufacturers anticipate serious affects on export activities due to sharp reduction in cotton output.

USDA has reduced Pakistan’s 2016/17 cotton production forecast as area harvested is estimated at 2.5 million hectares, down 11 percent from last year. Yield is estimated at 694 kilograms per hectare.

Growers have sown more corn and sugarcane this season and reduced cotton acreage. Corn and sugarcane producers benefit from tariffs that insulate domestic market prices from the international market, while cotton producers face lower prices and competition from cotton imports.

Yield is forecast to rebound this season as farmers exercise greater caution not to repeat last season’s attempts to lower input costs in response to low market prices.

In 2015/16, growers reduced pesticide applications which resulted in a 30 percent decrease in yield due to severe whitefly infestations.   Yields in 2015/16 were 544 kilograms per hectare, the lowest in the past 17 years.