December 04, 2007	Tuesday	Ziqa'ad 23, 1428

KARACHI, Dec 3: A steep fall in the arrival of phutti (seed cotton) from cotton fields in the Punjab had a negative impact on overall cotton production which declined by around 19 per cent at 7.276 million bales compared to 8.878 million bales harvested in the corresponding period last year.

At present, it seems that even downward revised production at 12.8 million bales from 14.3 million bales was not achievable and the country is likely to face yet another crisis in one of its major crops.

The widening gap between production and consumption is likely to swell import bill of cotton as the industry, with a capacity of over 10 million spindles, needs over 15 million bales, but there is a dim possibility that even 11 million bales production could be achieved.

According to Pakistan Cotton Ginners’ Association (PCGA) during the last fortnight (Nov 15 to Dec 1), arrival of phutti in the Punjab declined by 25.58 per cent, thereby giving production of 5.282 million bales, compared to 7.112 million bales achieved in the same period last year.

Higher arrival of phutti in Sindh during the review period could not offset the severe negative impact of short supply in the Punjab. In Sindh, arrival was higher by 6.27 per cent at 1.983 million bales as against 1.866 million bales in the corresponding period last year.

Consequently, around 0.789 million bales were short in supply during outgoing fortnight at 1.381 million bales compared to 2.171 million bales recorded in the same period last year.

But it is equally alarming that offtake of cotton by spinners continues to be very slow at 5.559 million bales as against 8.498 million bales purchased by them in the corresponding period last year.

However, slightly higher purchases had been made by exporters at 71,900 bales, compared to 67,305 bales lifted by them in the same period last year.

Due to short crop, unsold stocks lying with the ginners were also lesser at 1.545 million bales compared with 2.412 million bales held by them in the corresponding period last year.

Because of a highly perplexed situation, raw cotton prices continue to be on the higher side and are being quoted above Rs3,200 per 40kg.

Market analyst Naseem Usman told Dawn that demand would rise if the spinning industry manages to pass through its current critical conditions.

He said as WTO ceiling on Chinese imports are coming to an end in EU and US markets from next year, there was greater possibility that yarn would come in great demand from China.

Analysts believe that Chinese exporters would need huge quantities of yarn to meet the EU and US markets’ textiles and clothing demand up on lifting of ceiling from 2008.

Chinese made-ups are cheap and are quite popular in Western markets and this may cause damage to Pakistan’s apparel industry, they added.