Cotton supply up 70pc; crop likely to miss target

KARACHI: Cotton stockpiling by ginners till November 15, 2021 surged 70.16 percent, showing promising trend of production, which traders feared might miss the official target of 9.3 million by at least 1.3 million bales.

According to a fortnightly report by Pakistan Cotton Ginners Association (PCGA), cotton arrivals were recorded at 6.85 million bales, higher by 2.82 million bales against last year’s 4.02 million received in the corresponding period.

Out of total inflows, only 16,400 bales were exported against 20,600 in the previous year, a decline of 20.4 percent.

Around 6.22 million bales were sold to the mills, up 3.10 million, compared with 3.12 million last year.

Fortnightly flow remained at 595,804 bales, up by 3.62 percent to last year’s fortnightly arrivals of 574,994.

With the exception of the last year, the country had witnessed cotton supplies of above six million bales by this period. The highest were recorded in 2017 when they had reached 9.35 million bales.

By November 15, cotton arrivals in Sindh reached 3.43 million bales, higher by 83.35 percent than last year's 1.87 million during the same time.

Punjab witnessed a stockpiling of 3.41 million bales, up 58.65 percent, against 2.15 million received by the same time last year.

Naseem Usman, Chairman of Karachi Cotton Brokers Forum (KCBF), said cotton production was likely to reach 8 million bales in the country this year, while Cotton Crop Assessment Company had given a forecast of 9.3 million. “Thus, there are chances of a decline of 1.3 million bales against the official forecast,” Usman said.

Besides, CCAC gives a forecast for the cotton bale of 170kg each while PCGA cotton bale measures at 155kg, so there are chances of further cotton crop decline of 500,000 bales, according to KCBF official.

Traders said despite an increase in production compared to last year, mills needed to import 7.0 million bales to meet their demand. So far, import deals of around 4.5 million bales have been finalised.

Due to rupee depreciation and an increase in the cotton demand at the local market, prices have reached an all-time high level of Rs18,000/maund (37.324kg) for high quality cotton and Rs8,800/40 kg of seed-cotton. The official spot rate was Rs17,300/maund, so far the highest in the history of the country.