Phutti (seed-cotton) arrivals into ginneries declined by a whopping 43 per cent to 3.4 million bales till Nov 1st,2020 compared to 6.1m bales in the same period last year due to monsoon rains and pest attacks, showed fortnightly data released by the Pakistan Cotton Ginners’ Association (PCGA)here on Tuesday.
During the period, Punjab produced 1.72m bales while Sindh generated identical quantity of 1.72m bales. Of the total production, textile mills bought 2.57m bales while 17,600 bales were picked up by exporters.
Total 528 ginning factories were operational in the country including 193 in Sindh and 335 in Punjab.
“Cotton output is expected to fall as low as 5m bales,” PCGA Chairman Dr Jassu Mal told South Punjab News. “Production in Sindh has fallen mainly due to monsoon rains whereas Punjab’s output plunged due to pest attacks.”
The government projects cotton production to reach 10.98m bales for this season while the country produced over 8.5m bales in the last season.
Dr Mal said that the poor quality of seeds, lack of awareness among growers on fertiliser use and the failure of the governments — federal and provincial — in managing pest attacks are the reasons behind the consistent decline in cotton production over the last few years.
Subsequently, he said textile millers will have to import the raw material to meet the gap.
The decline in cotton output is a worrying sign for the textile industry particularly spinners as it will also have a partial impact on cotton prices, said JS Global’s Ahmed Lakhani.
Textile companies will have to rely more on imports, which carry duties and taxes at the import stage. This will naturally make them less competitive than regional peers, he added.
As per the official statistics, Pakistan’s annual cotton production has fallen from 11.9m bales in FY18 to 9.17 m bales in year 2020. With annual demand hovering above 15m bales, the textile sector will have to import the raw material.
“We will have to import at least 10m bales in the current year which will increase the country’s import bill. We could have easily saved this foreign exchange, had the government taken required action,” said Dr Jassu Mal.PCGA Chairman Dr Jassu Mal said that a large rural population in country’s vast cotton belt relied on ‘white gold’ for livelihood.
On the eve of World Cotton Day, the PCGA office bearers stressed on availing the occasion as
The PCGA was ready to play its part along with other stakeholders in efforts to regain the 15m bales production mark, they said.
Dr Mal emphasised the need of investing ample resources in improving the quality of cotton up to the international standards.
“This is a very serious situation that must force institutions to think whether the cotton farmers were diverting to alternative profit generating crops. If it turns out to be true, then how is it that their trust can be revived on cotton,” he said
“The world has employed technology to improve their crop size and strengthened their economies adding Pakistan must also follow the suit,” he added.
The PCGA chairman added that the association would submit its proposals and cooperate with all ministries and departments for revival of cotton cultivation.
“A comprehensive strategy needs to be finalised in consultation with all the stakeholders and government ministries and departments to elevate cotton production to 15-20m bales,” he said.
“Good quality seed and availability of agriculture experts and officials is all that is needed to achieve the milestone and not the vast tracts of land,” he summed up.
“The cotton production is declining rapidly and prompt action should be taken,” said Syed Zeeshan Kazmi of IGI Finex Securities. “Due to the drop in production it will not be possible to meet the needs of textile mills and for that we have to import cotton which will have a negative impact on textile exports,” he added.
Earlier, the All Pakistan Textile Mills Association (Aptma) said that cotton crop failure is costing Pakistan over $8bn per annum in lower GDP per million bales of cotton and $2bn for this year in additional imports, while the country needs to revive cotton crop to meet domestic demand.
“Millers will meet their immediate shortage from the local market, but the rest will be sourced from the international markets,” said Aptma Member Naveed Ahmed.
Meanwhile, Dr Mal said that "phutti" prices have gone up from Rs3,500 to Rs5,000 whereas the cotton prices have risen from Rs8,400 to Rs10,000 per maund over the last few months. In October, cotton prices hit a 10-year high of Rs10,500 per maund in line with the international markets.
Between July-September, the country imported cotton worth $382.6 million, the State Bank of Pakistan data showed. Meanwhile, cotton imports in the FY20 amounted to $1.71 billion, up 6pc from FY19.
However, Dr Mal warned that cotton growers stand to lose the most. As per the PCGA estimates, growers have lost more than Rs50,000 per acre against an investment of Rs80,000 in the ongoing season. Rains and pest attacks have wreaked havoc on the cotton crop.
