KARACHI, Nov 29: Cotton and textile sector is well poised to generate more than Rs1,200 billion this season of which growers are expected to receive about Rs100 billion while over Rs1,100 billion would be shared by ginners, traders, textile operators and exporters.

Market watchers estimate cotton crop size at 10.5 million bales this season. An almost 15 per cent increase in textile exports during last four months has maintained a steady demand for cotton in the local market. Growers are reported to be getting about Rs850 a maund on cotton seed and ginner over Rs2,000 on lint cotton.

Cotton growers in Seraiki belt in South Punjab and in upper Sindh are expected to be richer by Rs25 to Rs28 billion this season. A bumper crop despite persisting drought reports and good domestic market prices are expected to give a gross income of about Rs100 billion to the growers. After deduction of production cost and other charges, the net income would come to Rs25 to Rs28 billion.

But growers do not seem to be happy as they perceive the current cotton prices in Pakistan market to be lower than the comparable international prices. There is now a demand that Trading Corporation of Pakistan should step in to start buying premium quality contamination-free cotton.

But textile operators say that their spinning capacity has increased substantially and there is a lot of demand for cotton. New spindles and rotors have been installed and idle capacities have been revived creating more demand for cotton. Traders in the market also consider reigning domestic prices not viable for export.

Textile mills report consumption of about one million bales of cotton in July and August this year. During July to October yarn spinning ranged between 159 to 160 million kilograms every month. Cloth weaving is said to be about 44 to 45 million square meters every month.

These figures of cotton consumption and yarn spinning and cotton cloth weaving are doubtful because as many as 150 textile mills do not share their consumption and production data with either Textile Commissioner or even with All Pakistan Textile Mills Association.

Suspicion and fear inhibit these more than 150 textile mills from sharing their cotton consumption and yarn spinning figures. They conceal their cotton consumption and yarn spinning figures and trade with informal sector to evade sales tax and more importantly conceal their income to evade tax.

Neither the government nor APTMA has been able to come out with any solution of this problem of 150 mills default on giving information.

Ginneries reported arrival of more than five million bales of seed cotton till middle of this month. A substantial quantity of lint cotton has already been picked up by the textile mills and there is still more demand for cotton.

Banks have given generous credit limits to the big textile groups who are reported to be making a heavy buying to stock cotton for their year long consumption.

City based industrialists now look forward to an appreciable increase in the size of domestic retail and wholesale market in coming days because of cotton growers netting in additional Rs25 to Rs28 billion. More Pajeros, Hondas and Toyotas will be seen on the highways linking cotton belt zamindars with markets. There may be more demand for gold and jewellery and real estate value may start spiralling up in Lahore, Karachi and Islamabad.

Real boom has come from 15 per cent rise in textile exports in last four months which has generated about Rs132.50 billion during July to October this year period. Exporters say that substantial amount has been earned from value-added products mainly because of the concessions earned from European Union. There are expectation of getting tariff concession and market access to the US.

Exporters are optimist of earning anywhere from Rs500 billion to Rs600 billion this fiscal which means more employment and some relief for urban workers.

Domestic market, however, remains a worrying factor for the market analysts and planners. Cloth shopkeepers report not much turnout of the buyers this Ramazan. Ramazan is an occasion when buyers turn up in greater number for Eid shopping and that many marriages take place after Eid.