LAHORE: Worried at the continued bearish trend in the local cotton market, stakeholders have demanded that the government begin purchase of lint as per its promise and the Cotton Crop Assessment Committee should meet at the earliest to give its latest crop figures to enable them to readjust their strategies accordingly.
Cotton prices have fallen by Rs5,000 per maund during the last two weeks as the textile industry is showing its disinterest in lint buying apparently due to a record increase in the power and gas tariffs and unrelenting drop in the value of US dollar sending a wave of concern across the cotton sector.
Ginners have demanded that the federal government immediately begin purchasing cotton through the Trading Corporation of Pakistan (TCP) as per its promise of maintaining the minimum prices at Rs8,500 per maund.
About two weeks ago, cotton prices in the local market were up to Rs22,000 per maund, while raw cotton or phutti prices were Rs10,000 per maund and there was hope in the air that the prices would further inch up.
But due to the continuous decline in the dollar value, the downward trend in cotton prices in the international markets and hike in the prices of electricity and gas, the local market started witnessing a bearish trend. Cotton prices have come down to Rs17,000 per maund,while phutti have dropped to Rs7,500 per maund.
Cotton Ginners Forum chairman Ihsanul Haq says the market could have fallen more but the four-year extension of the GSP-plus status granted to Pakistan by the European Union has come to its rescue and the prices are now seeing a slight stabilisation.
He says the federal government had fixed an intervention price of Rs8,500 per maund at the beginning of the current cotton crop season assuring the growers that it would purchase at least one million bales from ginners through the TCP to stabilise the prices if these went down than this level. The government should now introduce the TCP as an active player in the market, he demands.
The Federal Committee on Agriculture (FCA) had set a total domestic cotton production target of 12.7 million bales for the cotton year 2023-24. However, despite the report of a significant reduction in the overall domestic cotton production because of a heavy attack of white fly and adverse weather conditions in most of the cotton zones across the country, the Cotton Crop Assessment Committee has not yet met to revise the crop production target.
Mr Haq says the lack of revised official estimates of the crop production is making it difficult for the stakeholders to formulate their strategies, like striking more cotton import agreements and buying the product from the local market, accordingly.
Therefore, he says, the CCAC should immediately convene a meeting to overcome the concerns about shortfall in the local cotton output among the stakeholders.
Published in Dawn, October 12th, 2023
