KARACHI, Nov 22: The country may have to import around two million bales of cotton even after harvesting the estimated 12.7 million bales during the current season 2006-07.
The flow pattern of phutti (seed cotton) from fields to ginneries so far indicates that the crop size would be around 12.5 million bales because Sindh crop is running short and Punjab is little better than last year.
The textile industry believes that cotton demand this year would be over 14 million bales and this will create a gap of around 1.5 to two million bales between demand and supply. Consequently, besides importing long staple variety the industry would also have to import substantial quantity of regular quality cotton to meet its demand.
Industry sources expressed resentment over government’s attitude towards the problems being faced by the largest industrial sector of the country.
“We have failed to understand the mindset of policymakers towards problems confronted by the textile industry which is the major source of foreign exchange earner as well as job provider in the country,” lamented former Aptma chairman Anwar Tata.
He said that the policymakers promote the view that the industry should learn to operate without official support but they fail to explain how to conduct business if it has to pay 14 per cent mark-up on its capital goods as well as working capital after getting the same at four per cent when BMR was being carried out about five years back.
Mr Tata was also critical about sudden decision for removing polyester fibre imports from DTRE and asking importers to pay 6.5 per cent duty.
According to official figures, around 6.807 million bales have been processed up to November 15, 2006 by the ginneries in both the cotton growing provinces of Sindh and Punjab. This is 0.9 per cent or 6,013 bales higher over the corresponding period last year.
However, slow phutti arrival from Sindh cotton fields is an indicator that the estimated production at around 12.7 million bales would be hard to achieve. Consequently, it is being privately estimated that raw cotton production during 2006-07 would remain around 12.5 million bales.
During the period under review cotton production in Sindh remained 13.23 per cent lower at 1.480 million bales as against 1.706 million bales recorded in the same period last year.
Despite the fact that arrival of phutti in Punjab was slightly better and up to Nov 15, 2006 around 5.327 million bales were produced or 4.55 per cent higher over 5.095 million bales recorded in the corresponding period last year, but it is expected that the arrival would flatter out in due course, particularly after first picking.
As a result of this prices of raw cotton in the domestic market are being recorded at higher level and are currently in the range of Rs2400 and above per maund.
It is interesting to note that fairly huge stocks of unsold cotton of around 2.078 million bales are also lying with the ginners but the underlying sentiment in the cotton economy as a whole is of depressing and uncertain as most of the textile units are reported to be faced with financial crisis.