17 October 2004	Sunday	02 Ramazan 1425

KARACHI, Oct 16: While cotton picking is at its peak in Sindh and Punjab, the government for its own reasons is not holding the meeting of the Cotton Crop Estimation Committee which is keeping all the stakeholders guessing on the final size of the crop. Cotton picking begins late August in lower Sindh and picks up momentum in September and now is reported to be in full swing as October enters the second half.

The ginneries in Sindh and Punjab have already reported arrival of more than 2.1 million bales by October 1 and expect roughly arrival of 3 to 3.5 million bales in the second fortnight which should be a record.

Therefore, the guess on cotton crop this season varies between 12 million bales and 15 million bales, but there is a consensus among all the stakeholders that it is of unprecedented size and higher than the highest 12 million cotton production achieved in 1991-92.

There is also a consensus that cotton production tempo should be maintained in the coming years so that the local textile industry which has re-structured itself by investing more than $3 billion in last four years has now more appetite for the raw material than ever before.

The government's decision to appoint a full time federal textiles minister in September was good news for all those involved in cotton trade and management of textile industry and exports. But the subsequent developments showed that textile industry ministry is proving to be a non-starter. Neither the agricultural ministry is ready to give up its job of supervising cotton cultivation, nor is the commerce ministry ready to part way with lucrative $9 billion textile export trade. The Industries Ministry also wants to keep its hold on its share of textile business. The Prime Minister is found to be a helpless spectator in a game, which involves Pakistan's biggest business that generates almost 12 per cent of the national income, engage 40 per cent of the industrial labour and same ratio of rural labour and constitute almost 68 per cent of Pakistan's total exports.

Delay in holding of the cotton crop estimation committee meeting is also said to be cause of the tussle within the federal cabinet. All along in the previous years, the committee belongs to the agricultural ministry but now the textile ministry wants to get information on availability of cotton. The textile minister is himself a big textile exporter and who has remained President of Pakistan Cotton Exporters Association for two terms. Textile industry put its cotton requirement at 12 million to 13.5 million bales because as Waqar Monnoo, the former Chairman of All Pakistan Textile Mills Association (Aptma) new capacities have been created in spinning and in the value-added sector. "Whether the cotton production is 12 million bales or 14 million bales it is not a big crop so long it remains less than demand of the domestic industry," Monnoo remarked.

The former Aptma chairman acknowledges that the size of cotton crop is 35 to 40 per cent bigger than that of last year and the additional yield has been obtained by the farmer without making any additional investment. As compared to last year, the crop has remained relatively safe from infest attack. He said Rs800 for a maund of phutti to farmer this year is much more in value as Rs925 a maund fixed by the government last year.

He also wondered if the Trading Corporation of Pakistan's (TCP's) intervention in cotton trading is helping the farmer. "The ginners are rolling in silver and gold," he said because they get Rs2,160 for lint and give farmer Rs750 to Rs800 for a maund.

Monnoo said that if government is sincere to support farmers they should take over management of 100 closed ginneries and provide Rs925 a mnaud price through those ginning units.

Akbar Hashwani, a former Chairman of Karachi Cotton Association believes that scarcity and abundance of cotton in any single year can be best addressed through hedging which is not being allowed to operate. He said that TCP intervention would prove ineffective as cotton crop is of huge size. Whatever the TCP will buy will prove to be burden on taxpayers of the country.

The TCP has been given about Rs10 billion by the government. There is no limit fixed for the TCP purchase of cotton. But knowledgeable sources say that TCP can buy as much as half a million bales. The bank's rates have also gone up by more than 3 per cent for the TCP and market analysts fear that this procurement can become a burden.

The TCP is being forced to buy cotton because of the presence of about 40 ministers in the cabinet who are from landed gentry and many of them have a vested interest in cotton prices. Quite a number of big farmers have set up ginneries in Punjab.