Weather, pest threaten cotton farmers

Wednesday, June 03, 2009
By Mansoor Ahmad (The News International)

LAHORE: Next cotton harvest might be a worry for Pakistani farmers, as in the absence of BT cotton productivity will remain hostage to weather and pest attacks. Global cotton prices are also expected to decline sharply in 2009-10.

Pakistan, being the only major cotton producing country where certified BT cotton seed has not been introduced, has been importing over three million cotton bales to meet the demand of the local textile industry.

According to the International Cotton Advisory Committee, cotton use in mills in 2009-10 is expected to increase in Pakistan, besides China (mainland), India, Bangladesh, Indonesia and Vietnam. Its mill use would decline in the United States, and many smaller countries in Asia, North America and Europe.

All Pakistan Textile Mills Association (Punjab Zone) Chairman Akber Sheikh, commenting on the matter, said that importing cotton is highly expensive for local spinners. Whenever cotton production is short of the mill requirement, local cotton rates also increase.

He said this way the spinners not only bear import-related expenses of three million bales, but also of the remaining 10-12 million locally produced bales. He added Pakistan needs lower cotton rates to remain in the global textile market, as the country has not been able to increase value addition in its textile products to the extent achieved by India and China.

Hamid Malhi, a progressive farmer, said that global commodity rates have declined sharply during the past one year. The decline in global cotton prices forecast by ICAC is worrisome for Pakistani cotton farmers, he said.

He noted countries like India have doubled their cotton production in the past five years and can afford to sell cotton at lower rates because of increased productivity.

Cotton yield in Pakistan has remained stagnant during the past two decades, while the cost of production has increased manifold during this period. Malhi said the prospects of lower global cotton rates spells disaster for local farmers.

ICAC has forecast an average decline in the global cotton rates of 60 cents per pound in 2009-10. The forecast is based on an expectation of rising cotton stocks next year.

The ICAC, however, states that major uncertainties regarding projected cotton trade in 2009-10 pose substantial risks for this forecast. World cotton trade is expected to partially recover in 2009-10, to 6.5 million tons (+8 per cent). Chinese imports are projected to rise only slightly to 1.45 million tons.

Beginning at the end of May 2009, the government of China (mainland) started selling cotton from the national reserve to domestic textile mills. The quantities sold will affect 2009-10 Chinese imports. India is expected to account for most of the expected rise in world exports, with shipments forecast to almost triple to 1.1 million tons. However, US exports are expected to decline by 11 per cent in 2009-10 to 2.3 million tons.

In 2009-10, world cotton production is expected to decline for the third consecutive season to 23.4 million tons (-1 per cent). Production is expected to decline in China (Mainland), Brazil, Uzbekistan, the CFA zone and Turkey.

However, production is forecast to increase significantly in India and slightly in the United States according to ICAC. World cotton mill use is expected to increase by 2 per cent to 23.3 million tons in 2009-10. This projection of ICAC is based on a modest recovery in world economic growth in 2010.

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