Study shows downturn in cotton production in Indo-Pak region

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LAHORE: The downturn in cotton output in both Pakistan and India indicates that international prices are bound to rise with currency under pressure in both countries. Hence, imports are expected to become more expensive, economic experts say. Cotton production this season is likely to miss the target of 14.5 million bales, which was set before the season started. It is likely that approximately 13.3 million to 13.5 million bales will be produced by the end of the season, sources say.

The figures of domestic cotton production in Pakistan and India issued by the Cotton Ginners Association of the respective countries show that total domestic cotton production in both countries has been lower than this year as compared to the previous year.

According to the statistics issued by Pakistan Cotton Ginning Association (PCGA), the total domestic arrival of seed cotton (phutti) till December 15, 2012 was 10,768,861 bales that is 267,157 bales and 2.42 percent less than last year.

The report further says that till December 15, 2012, total export of cotton was 171, 946 bales whereas 8,853,314 bales have been purchased by the Textile Mills and 1,743,601 bales are lying pending for sale in ginning factories.

The report details that during the period, seed cotton equivalent to 7,645,861 bales was received in ginning factories in the Punjab that is 1,110,364 bales or 12.68 percent less than the previous year. Moreover, seed cotton equivalent to 3,123,000 bales was received in ginning factories in Sindh that are 843,207 bales or 37 percent higher than the figures for the previous year. According to the report, 784 ginning factories in Punjab and 178 in Sindh were operational during the said period.

Former executive member of PCGA, Ihsan-ul-Haq, said that according to the report issued by Cotton Corporation of India (CCI) the total domestic production of seed cotton (phutti) in India was 6,186,000 bales up to December 16, 2012 that is 717,000 bales or 10.47 percent less than the corresponding period of the previous year.

According to the CCI report, a shortage in cotton production was observed in the Indian States of Gujarat, Maharashtra and Madhya Parades with 30 percent shortfall in production.

He said that due to shortfall in cotton production, rising export of cotton yarn and the rising price of the dollar versus the rupee, there has been a swift rise in cotton and phutti prices in the previous week. Moreover, the price of cotton lint has risen to Rs6,300 with the addition of Rs300 per maund whereas the price of phutti has risen to Rs2,925 with the addition of Rs150 per 40 kg. However, if gas outages continue in Faisalabad, then export of cotton and cotton price may be negatively impacted, he said.

Courtesy: The News

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