Pakistan’s New Crop Update: So Far, So Good
The 2012/13 cotton crop in Pakistan is off to a good start for the second year in a row – which is very welcome news after the country suffered through consecutive years of weather disasters in 2010 and 2011.
August 15, 2012
The 2012/13 cotton crop in Pakistan is off to a good start for the second year in a row – which is very welcome news after the country suffered through consecutive years of weather disasters in 2010 and 2011. Based on our own field assessments, we expect this year’s crop size to be about 2.2 million to 2.3 million tons.
There are still some weather-related concerns due to the unusually dry conditions, particularly in the Punjab region. Some fear that quality will be affected if the dry spell continues, and pests remain a challenge for growers throughout the country, too. But neither of those concerns has been enough to drive down prices on the domestic market.
Waiting for Water
There are complaints of water shortages at several locations in the Punjab and Sindh provinces, but early sowing and picking have indicated a good initial crop quality. Maintaining that quality throughout a dry period, if the rains don’t come, will be challenging. Rains are eagerly awaited by farmers in different districts as most of the crop is either at peak bloom or first open boll stage.
Some regions of Sindh province that were largely affected by heavy flood last year have witnessed good crop quality due to good surface-level moisture. That’s a positive but surprising development, given that temperatures have consistently ranged between 35-40 degrees Celsius and there’s been little water available, either through rain or irrigation.
Seed cotton continues its consistent flow into the gins, but that will slow to a trickle for a week or so due to upcoming Eid Holidays. Current quotes for domestic cotton lint range from 75 to 78 cents per pound, depending on quality and other parameters. Even at that price range, most farmers, ginners and traders are complaining of losses, but gins are consistently able to acquire quality cotton in the 78-cent range. Many domestic textile mills have booked healthy orders for yarn and fabric from the Far East and other destinations with a break-even point at about 84 cents. Because yarn demand is strong and mills are buying hand-to-mouth, domestic cotton prices should remain fairly steady in the short term.
Akash Jai Leemani is marketing manager for Sindh Agro Industries.