Cotton ginners increase purchase of seed cotton

Buying picks up as lower domestic cotton production expected

ISLAMABAD: Over apprehensions of lower domestic cotton production against earlier estimates for the current year, cotton ginners have reacted with enhanced purchasing of seed cotton.

The prices of seed cotton (phutti) have risen by Rs100-150 per 40 kilogrammes (kg) in various parts of the country. They touched the highest price of Rs3,000 per 40 kg for this season during the last two days. It is expected that prices of cotton lint will also follow the same upward trend.

Ihsanul Haq, ex-executive member of the Pakistan Cotton Ginners Association, said that after the devolution of the food and agriculture ministry to the provinces, there was no official estimate available for the current season’s cotton production; however, agricultural experts, the cotton commissioner and provincial agriculture ministries had initially estimated that 15 million bales of cotton would be produced during 2012-13.

Afterwards, due to crop losses in Sindh and Punjab caused by heavy rains, experts were forced to lower their estimates to 14.5 million bales. Stakeholders also said that the Meteorology Department had announced 35% more rains for July/August 2012 at the start of the cotton sowing season; therefore, most farmers in the riverine areas of Sindh and Punjab had opted to plant rice instead of cotton. For these reasons, reports of a corresponding fall in cotton production are circulating in the market.

The arrival of seed cotton (phutti) in agriculture markets and in ginning factories has been lower than expected: therefore, to ginning factories have accelerated their buying activity, resulting in the rise of seed cotton prices.

Published in The Express Tribune, November 13^th, 2012.