|
ANALYSIS: cotton sellers prevail upon buyers for higher price
KARACHI (May 31 2004): Cotton planting has almost been
completed in Lower Sindh, while it is in progress in Upper
Sindh and Punjab. Previously, there was no shortage of canal
water, sowing in one area was simultaneously, but now due to
shortage of canal waters, cotton growers get water on turn
resulting delay in sowing.
If previously, sowing was completed in one fortnight, now it
is completed in three fortnights.
As such, cotton harvesting would also be stretched to three
fortnights in a area. When harvesting of early sown cotton
would start by Middle of July then sowing would be in progress
in late areas.
Unlike previous years, cotton arrivals would be stretched to a
longer period of about six months and there will not be
arrival pressure in November or December months.
This process would help cotton market attain stability and
ensuring better return to cotton growers.
At present, the weather is reported conducive, and the sowing
operation is going on smoothly. By middle of July, ginning
factory in Mirpurkhas may resume operation in the new crop,
and first sale of new crop lint cotton may be made in late
June or early July month, which is estimated around Rs 2,800 -
Rs 2,900 per maund ex-gin.
Field reports indicate larger sowings, but reliable sowing
figures may not be available before August 04, but trade
circles estimate national sowing around 3.05 million - 3.10
million hectares in the 2004-05 season, producing about 11.5
million bales of 170-kg each.
The size of expected cotton crop in 2004-05 would squarely
depend on natural factors such as weather conditions,
rainfalls and pest attack, as human efforts have failed in
making any sort of improvement in cotton output.
India expects to increase its cotton productivity by over 15
percent through adopting new technologies in agronomy,
irrigation, and seed. It also expects to produce 19 million
bales of 170-kg in 2004-05 against 16.75 million bales in
2003-04, which if achieved would become the highest record,
and India would have some 1 million to 1.5 million local bales
surplus for export.
Despite our all-out efforts, we have not been able to make any
headway in cotton production in the last 12 years, we should,
therefore, think of revolutionising the centuries-old
agriculture system, and re-structure it to suit our
requirements.
Perhaps, the Ministry of Food, Agriculture and Livestock
(Minfal) may be the largest ministry with more than hundred
departments/ institutions/organisations most of them without
any worth mentioning performance.
Our negligence towards very important agriculture issues is
tantamount to economic terrorism, which works as a slow poison
for the whole country and its people, while physical terrorism
only kills some persons.
During the last week, the local cotton market remained steady
to firm and on the close of the last week, the KCA Spot rate
increased to Rs 3,100 per maund ex-gin. Lint bargains of
better grade were reported up to Rs 3,200 per maund ex-gin.
Average Grade cotton was selling around Rs 2,900 - Rs 3,050,
while Low Grade down to Rs 2,700. Spinners have shown good
interest in picking up better grade/prime mic. cotton.
Exporters also bought some lots matching with their export
types at different rates based on quality. Unsold stocks with
ginners are now estimated around 550,000 - 600,000 bales at
the close of May.
The market reports indicate import-booking of more than
300,000 bales of 480-lb each of different growths mainly USA
by local spinners for the new crop.
The progressive spinners have better idea of real total
domestic cotton consumption, which is estimated around 13
million local bales in the 2004-05 season than the official
consumption figures.
This season (2003-04), total imports of cotton by the close of
this season may touch the record high level of 340,290 tonnes
equivalent to 1.56 million 480-lb bales = 2 million of 170-kg
bales.
Sensing larger shortage between the demand and supply, the
export-oriented spinning mills are trying to secure enough
imported cotton supply to meet their long-term requirements.
Local conditions indicate steady cotton market in 2004-05 in
view of strong local demand and longer cotton arrival period,
while international market conditions appear easy on larger
expected cotton production and normal cotton consumption due
to depressing political conditions in Middle-East.
The New York Cotton Market depicted a easy trend in prices and
July-04 and October-04 contracts closed at cents 61.19 and
59.60 against last week's closing at 63 cents and 60.35 cents,
respectively.
The total US cotton export up to May 20, has reached the level
of 13.2034 million bales in 42 weeks and still 10 weeks are
left to close this 2003-04 cotton season.
The US domestic consumption of cotton on the basis of April is
annualised at 6.179 million bales against 7.058 million bales
in the same period last year. It appears that by the close of
this current season in July, 04, US annualised cotton
consumption would go down below the mark of 6 million bales.
In the coming years, US would have to face disposal problem of
even larger export surplus.
Uzbekistan has announced to discount cotton prices by 10
percent for spinning mills established from Direct Foreign
Investment (FDI) in the 2004-05 season. This is an attempt to
increase its domestic cotton consumption to improve its
economic conditions.
China is reported to have imported total 1.28 million tonnes =
5.877 million 480-lb bales up to April 04. It imported 291,000
tonnes = 1,336,175 bales of 480-lb during the month of April
04 - 67 percent from USA, 20 percent from African countries,
and balance from other countries, including CIS, Australia and
India.
China plans to plant to cotton some 5.60 million to 5.78
million hectares in 2004-05 season up 10 to 15 percent.
Last week, Brazil held a seminar in Beijing, China,
introducing its cotton to Chinese market, said that it is
competitive in terms of quality and price. In 2004-05, Brazil
expects a bumper cotton crop of some 1.24 million tons = 5.694
million 480-lb bales - an increase of 46 percent over the last
season by increasing area under cotton by 40 percent and yield
by over 4 percent.
In 2003-04 season, Brazil's total export sales currently stand
at 350,000 tonne = 1.6 million 480-lb bales. Next season, its
export surplus may be over 2.5 million bales.
The international trade is expecting drastic drop in cotton
prices in the 2004-05 season owing to better production
prospects and same as this season global cotton consumption,
but anything may happen to prospective global cotton
production of over 102 million 480-lb bales as we experienced
in 2003-04 season..
Curtesy: Business Recorder
|
Pakissan.com;
|
