LAHORE: An unexpected rise in the arrival of raw cotton at ginning factories for the second consecutive fortnight has surprised market watchers.

According to a Pakistan Cotton Ginners Association report covering Oct 16 to 31, a total of 4.291 million bales of raw cotton arrived at ginning units nationwide. Of these, 1.842 million bales were reported from Punjab and 2.449 million bales from Sindh. Out of the total 4.291 million bales, 1.18 million arrived during the past two weeks.

Cotton Ginners Forum chairman Ihsanul Haq attributed this unexpected increase in arrivals to a decline in the undocumented trade of lint, as the Federal Board of Revenue has begun scrutinising ginning units’ records more closely.

Based on field surveys, Kashif Islam from Islam and Sons foresees a gradual decline in raw cotton arrivals. He points out that extended hot weather and lower seed quality have impacted both the quality and quantity of the crop, while the mixing of cotton from various areas has further harmed its quality, causing variations within and between bales.

The textile industry now faces a dual challenge of low production and reduced quality.

In anticipation of these challenges, mills have secured a substantial quantity of cotton from other sources at favourable prices, leveraging a global market downturn. As a result, Mr Islam says prices are likely to remain stable within the current range despite the reduced domestic crop.

Naseem Usman of the Karachi Cotton Brokers Association is hopeful for a better harvest than initially expected. According to him, if the current trend holds, total white lint production in the country could reach seven million bales, up from the earlier forecast of up to 5.5 million bales.

He predicts that with a potential decline in cotton arrivals, the rate for quality cotton could touch Rs19,000 per bale by the end of this fortnight.

Published in Dawn, November 4th, 2024