It seems to be the usual scene on the cotton front as farmers nearly exhaust their seasonal harvest. The prices have started going up in the market, as growers claim they might not be left with even 1pc of the crop now.

The price started fluctuating at the fag end of harvesting and is now hovering beyond Rs5,500 per maund. This has prompted many to ask the government to buy cotton through a support price mechanism at beginning of harvesting and store it because the price is sure to recover at the close of the season. The government agencies can make money on existing stocks.

Farmers are venting their anger on the next crop. Early sowing, which should have been underway, is scant and slow. Even the fate of late crop would be decided by a host of factors; how wheat fairs in the market and what prospects rice has for next year.

The Chinese have relaxed rules for Pakistani farm products; lifting pre-clearance conditions on some of them. Though citrus and mango seem to be the most obvious beneficiaries, it should also help improve overall agricultural exports

But apart from the normal local pattern, another factor that might have pushed the market up is the Chinese decision to withdraw subsidy on its domestic cotton sowing. The Chinese concentration and money is shifting to staple — rice and soybean — instead of crops that are easily importable. The world thus knows that cotton next year might lose a big chunk of supplies due to shifting Chinese priorities and the market is looking up. On last Thursday, along with Karachi Cotton Association, the Cotton Corporation of India and the US market also reported escalating prices. It can only be welcomed by the cotton stakeholders. If the Chinese money finds its way to international cotton market, it should improve the global outlook for the crop.

The Chinese have also relaxed rules for Pakistani farm products; lifting pre-clearance conditions on some of them. Though citrus and mango seem to be the most obvious beneficiaries, it should help improve overall agricultural exports.

Incidentally, both these decisions have coincided with early cotton sowing season in Pakistan. In the last one decade or so, the crop has lost almost a million acres to other competitive crops. The seed problem has cost its early sowing, as there is hardly any yield difference left between early and late sowing. Even now, when it is time to sow early crop, there is hardly any clear strain available that the farmers can opt for.

In the last week, an expert panel considered over 50 new varieties (for official approval), which came on the heels of another 50 already being sown in the field. It leaves over 100 cotton varieties for illiterate and untrained farmers to choose from. The sheer number and speed with which these strains have been introduced in the market in the last decade hardly leave even the most progressive and informed farmer to pick one variety with a measure of certainty, leave alone the lesser informed ones.

The context of evolving Chinese trade relations with Pakistan provide encouraging signs; close proximity and economic trade corridor project between both countries provide a huge window of opportunity to both sides. Chinese market for Pakistani cotton could be a boon for farmers. Pakistan has to sort out its seed problems first. Then see how other competitive crops — sugarcane, maize and rice — are fairing in the market and how could be they put things in place to leave enough space for cotton.

Published in Dawn, Economic & Business, April 13th, 2015

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