December 8, 2001	Saturday	Ramazan 22, 1422

WASHINGTON, Dec 6: Pakistan’s MY (market year) 2001/02 cotton production forecast has been reduced to 1.74 million tons due to late-season pest damage. The MY 2001/02 cotton consumption estimate remains unchanged, based on the assumption that Pakistan’s textile exports will recover from the uncertainty following the Sept 11 attacks, the US Agriculture Department’s attache in Islamabad said in a report released on December 3. Attache reports are not official USDA data

PRODUCTION: Pakistan’s MY 2001/02 cotton production forecast has been decreased to 1.74 million tons due to significant yield losses from heliothis and army bollworms in central and eastern Punjab between mid-September and mid-October.

Despite early-season irrigation problems and late-season pest problems, increased area, generally favourable weather during the growing season and an increase in early-maturing varieties (now estimated at 42 per cent of the crop) helped to boost production.

CONSUMPTION: Based on the assumption that concessions will facilitate a recovery, there is no change in the consumption estimate.

TRADE: The MY 2000/01 cotton import and export estimates have been increased, based on eleven months of actual trade data. The MY 2001/02 import forecast has been lowered, based on mills’ intention to use accumulated stocks. The MY 2001/02 export forecast has been decreased as a result of the forecast decline in production and the expectation that Pakistani cotton will remain uncompetitive in world markets.

Thus far, only 2,000 MT of export contracts have been registered. MY 2001/02 exports are expected to consist largely of stocks held by the state-owned Trading Corporation of Pakistan (TCP). To support cotton prices, the government has authorized the TCP to buy up to 170,000 tons of cotton, if domestic prices fall below the minimum guaranteed price of Rs1,850 per 37.34 kg. As of November 7, TCP has signed procurement contracts for 36,500 tons, of which 17,000 tons has been delivered. Sources estimate that if prices remain strong, TCP will procure only about 50,000 tons, which it could either sell domestically or for export (possibly with a subsidy).

STOCKS: Most cotton stocks are held by the textile mills. Based on the decrease in the MY 2001/02 production forecast and mills’ intention to draw down stocks, MY 2001/02 ending stocks are forecast to decline.—Reuters