KARACHI, Dec 4: Phutti arrival into the ginneries has started dwindling as flow during the last fortnight registered a steep fall of around 0.626 million bales bringing the overall shortfall by 1.94 per cent over the corresponding period a year ago.

“In any case the final production of cotton would not be more than nine million bales which would mean a shortfall of 1.5 million bales from initial government estimates,” a leading cotton consultant Naseem Usman told Dawn.

He said at present a lot of 100 bales was being sold for Rs1.4 million. It means that 1.5 million bales loss would result in a huge loss of around Rs20 billion to the exchequer.

“But this debacle could have been averted provided the agriculture department had timely supplied pesticides to the growers. This colossal loss to the tune of Rs20 billion will mainly hurt the mainstay of the national economy — textile industry,” he maintained.

As the demand and supply situation of raw cotton ran in favour of sellers this resulted in soaring of prices in the local market to an unprecedented level of Rs3,300 per 40 kg. On the loser sides, he said, stood ginners and textile industry (ancillary) who had to meet their export commitments at a price agreed upon about six months ago.

During the last fortnight (November 15-30), phutti supply was short by 0.626 million bales and after putting together the entire stock of the last month the supply fell by around 0.900 million bales in a short period of one month.

On the other hand due to huge investment in the textile industry in the shape of BMR and expansion in the last couple of years the domestic consumption of raw cotton has risen to around one million bales per month. Therefore, the country will have to import a substantial quantity of over 2.5 million bales of cotton to meet the current season’s demand.

Due to pressure on raw cotton demand phutti prices also surged to an all-time high at Rs1,600 per 40 kg to settle down in the range of Rs1,400 to 1,500 per 40 kg. The official price of phutti this year is Rs850 per 40 kg.

The phutti arrival figures released by the Pakistan Cotton Ginners’ Association (PCGA) on Thursday, show a short supply of raw cotton by up to 130,131 bales or 1.94 per cent over the corresponding period last year. During the last fortnight, phutti arrival stood at 0.918 million bales as against 1.543 million bales in the same period a year ago.

The phutti arrival in Punjab remained slightly higher at 5.317 million bales or 3.75 per cent over the corresponding period last year when output was at 5.127 million bales.

But reports from cotton fields indicate that there is not much phutti left and the ongoing second picking could be taken as the last and final, and chances for third picking are remote.

On the other hand, Sindh has witnessed a steep fall in arrival of phutti during the period under review and stood at 1.268 million bales or 20.25 per cent short against the corresponding period last year when arrival was higher at 1.590 million bales.

Consequently, the overall arrival of phutti from all the cotton growing areas of the country remained short by 130,131 bales or 1.94 per cent over the corresponding period last year when arrival was better at 6.717 million bales.

Beside importing long staple variety, the textile industry this year will also have to import in huge quantity other varieties to meet their demand. The only silver lining one could see was the higher prices of raw cotton in the world market as well because this could help “our industry to stay viable and competitive with other suppliers of textile goods.”