22 July 2004	Thursday	04 Jamadi-us-Saani 1425

MULTAN, July 21: Price depression at the New York futures has rung alarm bells for the cotton growers in Pakistan as the deals for October and December reflect that they may even find it difficult to fetch the minimum fixed price of Rs925 per 40 kg this year.

Major part of the country's cotton production changes hand from the growers to ginners or millers in the last three months of a calendar year. The contracts being done at the New York cotton futures for this crucial period are fluctuating at around 46 cents per pound (lb).

Keeping in view the fact that the price of Pakistani raw cotton has always depreciated by two to four cents in the international market owing to lack of quality standards, the market analysts are forecasting that the price of phutti (cottonseed) may fall even below the officially fixed minimum price of Rs925 per 40 kg in October, November and December.

The government has increased the official procurement price of cotton to Rs925 per 40 kg for the season 2004-05 from the last year's Rs850 in the wake of hike in the input prices down the year.

Last year, the menace of pest pressure coupled with the shortage of affective pesticides had played havoc with the prospects of a bumper crop as in the end the total crop size hardly matched the previous year's production of 10.1m bales despite an increase of 15 per cent in the area.

However, better international prices trickled their affect on the domestic market and the prices of phutti surged (in monetary terms) to all time high level of around Rs1,500 per 40 kg. The phenomenon, thus helped the farming community to cover up their losses incurred in the wake of high pest pressure and subsequent greater number of pesticide applications.

Observers say that the growers have brought as much area under cotton cultivation as possible this year in the backdrop of prices they fetched last year. They say that if the situation in cotton fields remains normal viz-a-viz pest pressure then growers will have to face the trouble of disposing of their produce at an appropriate price especially in October, November and December.

In the wake of uncertain conditions in the days to come in the domestic cotton market, Small Farmers Association's chairman Ishtiaq Hussain Jafari has urged the government to keep the Trading Corporation of Pakistan in standing position to take corrective measures timely in case the prices of phutti falls down the official procurement price.