KARACHI, Aug 18: Pakistan could produce a larger-than-expected cotton crop this year if the crop successfully crosses September without a pest attack similar to the one that hit last year's crop, a senior crop researcher said on Wednesday.

Ibad Badr Siddiqui, vice president of the Pakistan Central Cotton Committee, told Dow Jones Newswires that initial signs are promising for a crop targeted at 10.72 million bales, up from 10.2 million bales last year. One bale is equal to 170 kg.

Pakistan's cotton crop is planted in May, and harvesting starts in August. PCCC oversees cotton research and production data in the country. "The crop area has increased, weather has been favourable so far, and the insect or pest attack isn't yet alarming," Siddiqui said. "Recent rains have also been beneficial for the crop."

Siddiqui said the crop last year was attacked by boll-worms as well as by heliothis disease. Provincial agriculture departments have taken steps to prevent any flare-ups of the disease this year, he said.

"If September goes well, there are prospects of production (rising) over the target," said Siddiqui. He said the crop area has increased in the biggest province of Punjab by 6.14pc over last year to 2.534 million hectares and in Sindh by almost 9pc to 611,000 hectares.

A larger crop in Pakistan comes amid forecasts of a global rise in production with the US, India and China also expected to harvest bigger crops. Siddiqui said Pakistan's cotton crop will still be lower than the expected demand from the country's textile industry, estimated at 12 million bales this year because of the rapid expansion of capacity by textile mills.

About 65pc of Pakistan's total export earnings are contributed by textiles and cotton-based products. In the fiscal year ended June 30, 2004, textile and cotton exports rose 11.3pc on year to $8.04 billion, or 66pc of overall exports, fuelled by bigger shipments to the US and Europe.

"Look at China which is the biggest producer in the world, but is also a huge importer because of textile demand," he said. Siddiqui said cotton prices in Pakistan are likely to be influenced by global prices and domestic production this year, but on the whole prices are expected to rise.

Cotton from the new crop was quoted at Rs2,200 a maund on the Karachi Cotton Exchange on Tuesday, little changed from the same period last year. That is far below a peak of Rs3,600 reached in November 2004 when the market rallied on fears of lower output and on high international prices of more than 80 cents a pound.

In comparison, December cotton futures on the New York Board of Trade closed at 47.32 cents a pound Tuesday. Siddiqui said Pakistan has the potential to improve the yield of its cotton crop, which on average is below global average yields.

Pakistan produces 5.72kg of cotton per hectare compared with the global average of 6.35kg/hectare, he said. He said Pakistan needs to take steps to improve technology and introduce a system of quality and grading to improve the prospects of its crop.

The current cotton trade is dominated by the private sector which needs to take steps to ensure that cotton is priced on the basis of quality and grade rather than variety or station, he said.

"The government is also determined to implement a cotton standard and grading system at the grass-roots level," he said, adding the system will improve the quality and price of Pakistani cotton in the international market.