Cotton offtake may go up this season: Rising PSF cost
By Sabihuddin Ghausi
KARACHI, Sept 26: A quantum jump in polyester fibre cost caused by the rising international petroleum prices will force the textile mills in Pakistan and other parts of the world to consume more cotton this season, cotton watchers say.
A rise in cotton consumption in Pakistan’s textile industry is being forecast when conflicting assessment is being made on the size of the cotton crop this season. There are optimists who are confident of picking up more than 15 million bales despite rains and floods. But there are bureaucrats of Punjab government who do not see good prospects of the crop because of fear of infestation that comes with rains and wet weather.
But this game of crop assessment is going on for years. Farmers and ginners want to downplay the size to get a higher price and the users, who are spinners, project it at the higher side to keep the prices low.
Appetite for cotton in Pakistan’s textile industry has increased considerably because of the expansion in spinning sector capacity and other sectors as well. In the current fiscal year’s budget, the government gave a tax incentive package to encourage mills to consume more polyester fibre. But the emerging picture gives an entirely different image, and mills are likely to continue to depend on cotton.
Spinners anticipate consumption of more than 15 million bales of cotton this season as they contend that they bought 14.75 million bales last season. The officials put the cotton consumption last season at 11.50 million bales, which will increase to 12.50 million bales.
As a rule, textile mills conceal cotton consumption and yarn production figures from their own body the Pakistan Textile Mills Association and also from Textile Commissioner’s office. There is an unending conflict between the government and millers on cotton consumption and carry over stocks figures.
But the global picture of cotton consumption and availability also remain unpredictable as cotton watchers suggest to wait and see how China makes moves in the world cotton market in the coming weeks. But the cotton watchers, on the basis of initial assessment, predict global consumption of cotton to rise to 110 million bales this year as against 107 million bales. The carryover stocks of cotton at the end of this season is expected to remain low than at the beginning of this season because the cotton production may not be up to expectation in 2005 but consumption is bound to increase.
In Pakistan, statistics of cotton production, consumption and carryover stocks remain a tool in the hands of active textile players who are big farmers, ginners, traders, spinners and operators of the value-added sector. Each player use statistics to his advantage at a given time at the cost of others. None of these players of textile sector has matured enough to give equal share in the cake.
Ginners have already reported an almost 50 per cent drop in cotton arrivals at the ginneries to about half a million bales by September 15 which the spinners say is deceptive and misleading. “We are getting only Rs950 for a maund,” Haji Ibrahim President of Pakistan Cotton Ginners Association informed Dawn when he was contacted on his cell phone in Khanewal late last week.
Dr Aslam Gill, a director of the Pakistan Central Cotton Committee (PCCC) in Multan, expects a good crop in Punjab. He said that crop prospects are good and farmers are managing it well.
Farmers say that only three lakh acres of land with cotton has been affected by the recent floods. Cotton has been cultivated on 6.5 million acres in Punjab this season as against a target of 6.3 million acres.
A damage to cotton on three lakh acres in Rajanpur and adjoining areas will not make much difference.
Crop position in Sindh is being seen as quite encouraging and apparently there is no reason to worry. But a final assessment of the crop will be made on Tuesday when experts from the cotton growing district will give their assessment. “This assessment will not be final as weather remains a big factor and that is unpredictable,” a researcher in the PCCC said.
