Cotton prices may fall further if electric and gas supply is not restored for the textile sector, says Ihsan-ul-Haq. DESIGN: CREATIVE COMMONS
ISLAMABAD: Due to periodic disruptions of electricity and gas supply throughout Punjab, textile mills have deferred procurement of cotton lint from ginning factories, which observers say may lead to a fall in cotton prices.
Market sources said there are worries about a slowdown in the textile production process, a fall in cotton exports and the resulting redundancy of tens of thousands of workers. These are coupled with fears of the crisis spreading to cotton ginners and farmers.
Ihsan-ul-Haq, ex-executive member of the Pakistan Cotton Ginners Association (PCGA) said that due to an unexpected increase in seed cotton (phutti) arrival up to December 15, 2012 and the depreciation of the rupee against the dollar, the cotton price has been forced downward by around Rs200 per maund, subsequently bringing cotton lint prices down to Rs6,000-6,100 per maund.
He also added that that cotton prices may fall further if electric and gas supply is not restored for the textile sector.
“The crisis faced by textile mills may also force the closing of ginning factories with it,” he said; adding that gas companies had promised the restoration of gas supply to textile mills in Rahimyar Khan and other regions of Punjab, but had yet to do so, even as the crisis in the cotton industry is worsening by the day.
Published in The Express Tribune, December 25th, 2012.
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cotton must be good for Pakistan