Improved cotton yields

Cotton available to ginning factories sees large increase of about 16%

Nationwide cotton output has shown a healthy increase this year, despite a decline in Punjab’s production. A cotton industry trade group says output this year is up 22% on the back of outstanding growth in Sindh, where output rose 84% and easily absorbed the impact of a 16% decline in Punjab’s yield to date. Cotton available to ginning factories also saw a large increase of about 16%, which will invariably help increase supplies of cloth and other domestically produced raw materials. The increased availability of local raw cotton and processed products will also help reduce the textile industry’s need for raw materials from abroad, which in turn will help reduce the country’s import bill. On a related note, less than 5% of total bales produced by local gins have been exported, reflecting the high demand from the local textile industry.

However, the large increase in cotton output is still below the government’s projections at the start of the year. This is mainly due to the impact of losses caused by a deluge of whiteflies causing crop losses in Punjab. The industry group expects output for the full year to be around nine million bales, well off the government’s 11.5 million target — which we must note would be an all-time high for the country. Another cause for concern is the relatively high level of unsold stock available with ginners — over 15% of output this year, and almost double the normal amount.

Read Cotton production slows as white fly attacks crop

However, rather than being a form of hoarding, industry experts are blaming economic instability and policymakers’ lax attitudes. The rupee’s appreciation against the dollar and rising energy prices have buyers acting more prudently, while outstanding tax refunds for exporters mean these companies have less money to spend on raw material stocks. Meanwhile, the Trading Corporation of Pakistan is not buying up stocks to build a buffer and help stabilise prices, which could cause farmers to sow more lucrative crops next year, setting the stage for another cotton shortage, which would take us back to square one.

 

Published in The Express Tribune, October 21^st, 2023.

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