As the textile industry worldwide, and Pakistan in particular, starts reviving after surviving the peak of the Covid-19 crisis, the cotton crop seems to be on a revival course as well. All farmers, who abandoned it during the last decade, are convinced that the crop’s fortune is waking up, for now at least — and the policy-makers agree with them.
The stage for cotton redemption was set by a sudden rise in demand and prices in the world market. The ever-dwindling value of the rupee not only doubled the impact of import for Pakistani millers but also made it next to impossible to calculate the final cost of production, rendering import commercially non-feasible for the industry. International cotton prices (in rupee terms) during the last year have gone up by almost 30 per cent — from Rs12,606 on July 1, 2021, to Rs18,259 by mid-February this year.
Another problem, which made import even more problematic, is the non-availability of shipping space. It takes more than 120 days to ship cotton to Pakistan these days, against the 30-day hiatus in pre-Covid times. These circumstances deflated the textile industry’s claim that it could thrive, even survive, on imported cotton and forced it to value local crops, thus setting the stage for the cotton revival in the country.
“In the first year-and-a-half (of Covid), all major world brands had their stocks exhausted as cotton supplies got squeezed quickly but demand died slowly — stripping the brands naked of their product,” Kamran Arshad, owner of the Ghazi Fabrics, explains the demand side. With different governments incentivising their industry and compensating their people, the demand for textile products started coming back but, by that time, shipping lines had stopped and industry was closed. As the world textile industry started reviving, demand became too overwhelming for it to meet.
Circumstances have deflated the textile industry’s claim that it could thrive, even survive, on imported cotton and forced it to value local crops
Luckily for Pakistan, its industry started some eight months ahead of the rest of the world because of a relatively milder Covid impact, and its entire capacity got booked within weeks — sending it in a frantic chase for cotton and improving local prices, he states.
In fact, production revival had started last year when acreage fell by 17pc in Punjab — from 3.8 million acres in 2020 to 3.1m last year — but production fell by only two per cent. It was largely because of better seeds and germination, pushing plant population from 15,500 in 2020 to 17,800 per acre in 2021 in Punjab, narrates Dr Saghir Ahmad, director of the Central Cotton Research Institute (Multan).
Due to this factor, the average yield jumped from 15.68 maunds in 2020 to 19.62 maunds per acre in Punjab in 2021. In Sindh, it was even better; 30 maunds per acre, pushing the national average to 25 maunds per acre. This better production, along with a massive rise in world prices, has now set the stage for acreage expansion this year, he hopes.
Another problem is the non-availability of shipping space — it takes more than 120 days to ship cotton to Pakistan these days, against the 30-day hiatus in pre-Covid times
“Apart from the claims of better seeds, more of a guess rather than documented fact, other factors like weather, farmers’ better management and the government announcement of support price played a bigger role in yield revival,” Dr Asif Ali, Vice-Chancellor of Nawaz Sharif Agriculture University (Multan) thinks.
Since cotton had generally fallen out of farmers’ favour in the country, only expert farmers, who had more confidence in their management skills, risked it last year and won through superior farm practices. The federal government played a decisive role when it, for the first time, announced a support price of Rs5,000 per maund — boosting farmers’ confidence in the crop’s prospects. The weather stayed favourable through the crop life cycle and Pakistan could report overall yield improvement, he states.
Though the support price of Rs5,000 remained irrelevant because the market stayed much higher than that, it did provide early consolation and confidence to farmers, says Muhammad Ramzan — a cotton trader from the Central Punjab area. Against the official announcement of Rs5,000 per maund for phutti, the price in the open market on average has so far been Rs6,300 per maunds in Punjab and it translates to over Rs20,000 per maund lint. The current lint price is Rs22,000 per maunds, even more than the world prices. This price trend, if it holds, would see a massive expansion in the area this year, and early signs are already there, he claims.
Given the kind of confidence generated by crop performance last year and the price trends, Punjab is hoping for a massive expansion in cotton acreage this year. “We would be targeting four million acres but aiming for crossing it,” says Hussain Jehania Gardezi, Minister for Agriculture in Punjab. The province is preparing for expansion by taking up all issues with the federal government for making it possible.
“Punjab has taken up the issue of new support price for this year — by factoring in increased cost of production. It wants huge imports of PB Ropes — for dealing with Pink Bollworms — and requesting federal cooperation. It has also taken up the seed traceability issue with the Federal Seed Certification and Registration Department (FSC&RD) because the province is facing a seed adulteration problem. This seed issue has assumed added significance this year because of the expected increase in areas. All these issues are being thrashed out with the federal government and within the province for ensuring even better cotton performance this year.”
Dr Asif Ali, the vice-chancellor, however, suggests some additional measures as well. “If the Punjab government wants to build on last year’s yield success, it should introduce sowing zoning — early, mid and late sowing — so that the entire crop in one zone is sown at the same time, has uniformity in crop development, suffers identical pest issues problems and make its management easy. Right now, the crop is sown at various times in the same vicinity. Thus, the crop, developing at three different stages, keeps suffering various levels of pest attacks, making it almost impossible to deal with the pest problem and keeps the entire crop under one kind of pest attack or another its entire life cycle.”
Published in Dawn, The Business and Finance Weekly, March 14th, 2022