October 27, 2002	Sunday	Sha’aban 20,1423

MULTAN, Oct 26: The current cotton arrival season has opened with an unusual aspect: so far the growers are fetching international parity price against their produce in the domestic market.

Against the minimum official fixed price of Rs800 per 40kg, Phutti (seed cotton) is receiving a price ranging from Rs860 to 940 per 40kg in various cotton growing areas of the country.

Similarly, the lint prices have also been showing an upward trend with ginners fetching a price up to Rs2200 per maund (37.325kg) of lint, which, if calculated on the basis of minimum fixed phutti price, should be around Rs1900 per maund.

But, the official phutti price was not reflective of both the trends in international market and the growers’ cost of production. However, the expected shortfall of 10.5 per cent in the global production of silver fibre has turned the international market bullish leaving the local buyers to remain content with the indigenous cotton for their demand of medium and long staple cotton.

Price of the B index cotton in the international market is at present ranging between 45 to 46 cents per pound. Therefore, the price of a maund of B index lint in Pakistan at the current rupee-dollar parity (Rs 59) should be around Rs2200, which is almost prevailing in the local market.

After three successive years of price depression on the phutti front, the current season has so far been trading favourably for the farming community. But, the analysts do not see this bullish trend in the local cotton market to prevail throughout the season.

They say the market will soon rationalise at Rs2050 per maund of lint and Rs860 per 40kg of phutti. The buyers are strengthening their stock positions to manipulate prices in the local market later on during the mid-season when influx of phutti will be at its peak, an analyst remarked.

But, the crop size will also play a decisive role in the cotton market in days to come as it has to be seen that how much the cotton leaf curl virus (CLCV) has damaged the crop in the Punjab after its resurgence this year on an alarming ratio in the backdrop of officially admitted 11 per cent shortfall in cotton cultivation as compared to the previous year in the Punjab, which produces 80 per cent of the country’s total cotton production.

Prices of phutti during the last week depict an interesting picture as the average price in Rahim Yar Khan district had been Rs930 per 40kg against other cotton growing district of the Punjab where it averaged at Rs870 per 40kg except for Rajanpur where the average price was Rs905 per 40kg.

Rahim Yar Khan was the first district to be selected for the production of contamination-free or quality cotton last year. The government and APTMA had announced Rs200 and Rs75 premium for the production of per maund of zero-contamination and less- contamination cotton, respectively. Although both TCP and Aptma later on, by and large, betrayed the growers and the ginners on the payment of premium, the cotton of Rahim Yar Khan is fetching the bet price owing to its reputation for being the quality cotton.