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Gargantuan growth in cotton economy




  • LAHORE (June 25 2004): Massive investment is continuing in the textile industry, which is moving ahead at galloping speed. According to various reports, another 1.5 million to 2 million state-of-the-art spindles are being installed during the current 12 months which is unprecedented in the history of Pakistan.

    Downstream, the different sub-sectors and the textile auxiliary industries are also being promoted and established with added enthusiasm.

    The phenomenal increase in investment in textile industry in the country is also being definitely made in shuttle-less looms, dyeing and finishing, production of terry cloth and also the manufacture of denim and knitted fabrics including their garments.

    The all-round progress and development in this sector is proceeding at an impressive speed.

    Besides the rotors being used to spin the open-end yarns, it is estimated that the installed spinning capacity in the country has jumped to nearly 9 million spindles.

    Therefore, if current (2003-04) cotton consumption in Pakistan is about 13.5 million bales (170kgs), it is likely to jump to 14.5 million bales during the forthcoming season (2004-05).

    Pakistan will be consuming 15 million bales of cotton per annum in the foreseeable future.

    Almost all the sub-sectors of the textile industry are very upbeat regarding their further development.

    All Pakistan Textile Mills Association (Aptma) chairman Waqar Monnoo has extolled various provisions of the federal budget announced by Finance Minister Shaukat Aziz earlier on the 12th of this month and looks forward to a speedy development of the textile industry in Pakistan.

    The fast changing scenario in the textile industry not only signifies large investment outlays which will increase employment, production and exports exponentially, but it is also likely to turn Pakistan into one of the leading suppliers of superior textile products in the global markets.

    With this type of increase and buoyancy projected for the textile trade and industry in Pakistan, imports of sundry styles of cottons from various origins can shoot up from current year’s (2003-04) estimate of 2.5 million bales (170kgs) to 3.5 million bales during the forthcoming season (2004-05).

    According to Mian Mohammad Ahmed, chairman of Indus Dyeing Group, a leading textile conglomerate, both local and foreign demands for cotton yarns are presently satisfactory.

    Declared output of domestic cotton on ex-gin basis this season (2003-04) is around 9.8 million bales (170kgs), which could move up to 10.5 million bales during the forthcoming season (2004-05).

    However, some optimists are counting on even higher production figures for next year because the growers received record prices for their seedcotton (kapas/phutti) during the outgoing season (2003-04).

    Thus, larger areas are estimated to have been planted for the forthcoming season (2004-05) which should increase the output.

    All optimism will be well founded if the weather remains favourable during the season for the next cotton crop (2004-05).

    This month has seen widespread rains in the country, both in northern areas and the cotton-belt, but these showers have been moderate, though welcome.

    Up to now, the precipitation was being described as a pre-monsoon phenomenon, but henceforth, the rains are being called as early monsoon showers, which are expected to increase and gather momentum this year and would be beneficial for the crop.

    Reports of various attacks of different types of pests and insects have been received from certain parts of cotton-belt, but up to now, they have been mostly described as being of non-injurious intensity.

    The development of cotton plants are reported to be good. Due to decrease in lint off-take in the domestic market over the past several weeks, ginners have slowed down their purchase policy for the new drop (2004-05) seedcotton, but may resume their interest to process next cotton crop early next month when sales tax of 15 percent on lint cotton will stand withdrawn.

    Massive slump in New York Cotton futures market during the previous weeks which has resulted in 16-month low levels for the prices has also instigated the domestic mills to slow down their purchases of domestic cottons.

    However, Pakistan mills continue to purchase imported cottons regularly from a wide variety of foreign origins and could shop close to 3.5-4 million bales (170kgs) next season (August 2004 to July 2005).

    On the average, Pakistani mills are generally performing well and achieve parity against their yarn sales at Rs 3,000 per maund (37.32kgs) without the 15 percent sales tax. Mills’ stocks of cottons purchased at higher cost several months ago has now declined.

    However, when a prominent ginner from Sultanabad in Sindh offered to sell new cotton crop (2004-05) at Rs 2,400 per maund about a week or ten days ago, mills did not pick it up.

    Mills are presently looking forward to pick up domestic lint at Rs 2,200 per maund (37.32kgs) and remain very bearish on the cotton front.

    Sindh ginners are holding an estimated 60,000 unsold bales from the outgoing crop (2003-04) whereas, their counterparts in Punjab are said to be storing an unsold inventory of 400,000 bales.

    Actually, other things being equal, mills prefer to spin imported cottons, which they find relatively without any hassle due to better style and consistency and also its year-round availability in most cases.

    The price for new crop (2004-05) seedcotton (kapas/phutti) in Sindh reportedly ranged from Rs 1,150 to Rs 1,175 per 40kgs, while in the Punjab, it was said to be higher by Rs 50 per 40 kilogramme.

    A sale of 400 bales of current crop from Nawabshah in Sindh was reported at Rs 2,750 per maund (37.32kgs) without the 15 percent sales tax, while the price idea for good grade lint from Punjab was said to be up to Rs 3,100 per maund.

    Main buyers who make occasional purchases in the market are those spinners operating on a hand-to-mouth basis.

    The overall tone of the cotton market on Thursday reportedly remained dull and depressing till the evening.

    Curtesy: Business Recorder

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