LAHORE, Nov 19: If the pace of the cotton arrivals in the market is any indication, Pakistan is set to reap a bumper crop of 15 million bales during the current harvest, surpassing the record output of 14.8 million bales picked last year.
The cotton arrivals rose by almost seven per cent or 0.55 million bales to 8.5 million bales by Nov 15 from 7.9 million bales a year earlier, according to the numbers released by the Pakistan Cotton Ginners Association (PCGA) for the current crop.
The crop size will far exceed the earlier estimate of 12.7 million bales by the Cotton Crop Assessment Committee as well as of 14.5 million bales by the Cotton Research Institute Multan.
While the country is going to harvest record size of cotton crop, many spinners have already imported around 0.5 million bales from India and elsewhere and booked another million bales for delivery over the next couple of months.
“The difference of Rs200 per 40kg in the domestic and global cotton prices is pushing the spinners to book cotton from India,” All Pakistan Textile Mills Association (Aptma) chairman Ahsan Bashir told reporters on Monday. Other Aptma leaders were also present on the occasion.
“Some vested interests are trying to manipulate the domestic cotton market to keep domestic prices higher than the international market by forecasting a much lower crop. This has encouraged the spinners to import cheaper cotton. This means that we will have close to 16.5 million bales for conversion into yarn this year compared to our annual consumption of 15 million bales. This will hurt the interests of growers,” he warned.
While local cotton is priced at Rs6,200 per 40kg, India’s cotton at $0.80 a pound costs Rs6,000 per 40kg to the spinning mills.
“Importing cotton from India is as good as buying from the local market,” said Shahid Mazhar, convener of Aptma-Punjab’s cotton committee.
He said the first delivery from India usually takes 15 days to mature. “After that you can book and bring up to 300 bales every day. The import from India also doesn’t involve any additional financial charges,” he said.
Ahsan said the cotton prices were Rs400-500 per 40kg higher as of today than a year ago. “The growers are getting around Rs3,200 per 40kg of their crop (raw cotton), which is a good price if compared with international rates.”
The global cotton prices are on the decline for some months now on the back of bumper crops in cotton producing countries like China and India. Wisal Mannoo, vice-chairman of Aptma, said the industry had the capacity to convert 17 million bales of cotton into yarn provided the government ensured uninterrupted supply of gas and power. Around 70 per cent of the country’s total spinning capacity is installed in the energy-deficient province of Punjab.
The number of installed spindles in Punjab textile mills is estimated to be 12 million but only 75 per cent of them are operative because of energy shortages.
“There is a lot of demand for Pakistani yarn in China where 30 million spindles have already been closed down over the last few years. The growing Chinese demand for our yarn offers us a big opportunity to boost our textile exports to $14 billion this year.
But that depends on continuous supply of energy to the manufacturers,” said Shahzad Ali Khan, vice-chairman of the recently revamped Pakistan Central Cotton Committee (PCCC).