KARACHI: A shortfall of around 3.3 million cotton bales to 9.9 million bales during the crop season 2016-17 will force leading users and importers to strike deals with USA, India and Brazil and other major cotton producing countries, cotton experts said. Pakistan is facing a shortfall of more than 3 million bales against a target of around 12.10 million cotton bales in the current crop season, Ghulam Rabbani, a senor member of Pakistan Cotton Association, said.
There was a time when Pakistan produced a record bumper crop of around 14.88 million bales in the 2014 crop season till September. Due to falling supply and tendency of farmers to move to other cash crops like sugarcane and rice, the lint cultivation area witnessed a decrease in the main cultivation zones in country. Growers were targeting to sow crops in more than 2.9 million hectors of land, but it was not possible to achieve 100% land sowing target.
The attack of viruses like Cotton Leaf Curl Virus (CLCV), bollworm and yellowing of crops are also major causes of decrease in crop size. Pakistan is expecting to import more than 2 million bales during September 2016-January 2017 on account of slightly higher demand from textile and spinning sector. The Pakistan textile sector buys around 11 million bales of cotton yearly on average and the remaining needs of about 1 million bales of cotton are met by imports and other sources.
Indian cotton Shanker-6 variety will cost around near 84-87 cents per pound. Currently, Pakistan’s cotton price in the international market is around 69-70 cents per pound.
Pakistan has so far exported around 2,500 cotton bales by the end August to Bangladesh, Thailand and other regional countries. By August 2016, the country has matured imports of about 35,000 bales while import of more than 50,000 bales was in the pipeline.
Prices for December New York Futures contract dropped from 73 cents per pound to 67-68 cents per pound. China Cotton Index remained stable in September 2016 to 96 cents per pound 14,100 RMB/tonnes. Lint prices around the globe dipped in August-September.
USA is the world’s largest exporter and this could put downward pressure on prices globally. India’s exports are projected to be lower too as Pakistani traders are reluctant to sign big-money deals with Indian traders.