KARACHI: Cotton production has plummeted 29 per cent to 8.631 million bales this season from around 12m bales during the comparable period of last year, the Pakistan Cotton Ginners’ Association (PCGA) said on Thursday.
Stakeholders estimate that the expected shortfall of 4.5m bales (170kg each) by the end of this season would deal a blow of about Rs260 billion to the economy.
Monsoon rains and heavy floods badly affected crop in Punjab, which produces almost 80pc of the country’s cotton. Moreover, poor quality seed, pesticides and pest attack also had their toll on the crop.
As of Dec 1, cotton production in the province stood at 5.102m bales, a fall of 39.95pc (3.395m bales) compared with 8.498m bales produced during the same period last year.
The damage to Sindh crop fared comparatively better as 3.26pc of the total crop had been damaged. The province has produced 3.528m bales as against 3.647m bales a year ago, showing a shortfall of around 118,735 bales.
Cotton analyst Naseem Usman feared that Pakistan would manage to produce around 10m cotton bales by the close of the season, which is expected to end two months earlier. The country produced 14.9m bales last year.
The current season’s crop estimate was initially placed at around 15.5m bales but later it was revised downward twice by the Cotton Crop Assessment Committee (CCAC).
Calculating the expected loss, he said at the current rate of Rs5,200 per maund the loss of 4.5m bales will be around Rs140bn. Other losses will include cost of oil and oilcake which could be around Rs70bn due to short crop.
All Pakistan Textile Mills Association (Aptma) Chairman Tariq Saud said that around 1.7m bales have been imported by the spinners so far, and if the industry runs at full capacity it would need another 1.5m bales to meet the shortfall. This means the country will have to pay around Rs50bn in foreign exchange.
Therefore, overall negative impact on the economy because of short crop would come around Rs260bn.
However, the current pattern of buying of cotton by the spinning industry points to less-than-expected demand owing to problems faced by the industry, Mr Saud asserted. Spinners have so far purchased 6.289m bales as against 9.375m bales during the same period last year.
The unsold stocks of cotton lying with ginners stood at 1.989m bales as against 2.444m bales in the same period last season. Only 612,320 bales reached ginneries during the last fortnight (Nov 15 to Dec 1) compared to 1.707m bales recorded last season. Similarly, only 919 ginning units are currently operating in the country as against 1,139 last year.
News source: Dawn