Cotton ex-gin prices increase by 11.11 percent to Rs. 7,500 per maund

Sindh and Punjab, both failed to achieve production targets set by Federal Committee on Agriculture (FCA) for the current year reason being the under tillage, water shortage and increasing fertilizer prices hampering production.

Furthermore, ex-gin prices in the local market posted an increase during the last week.

According to data released by the Karachi Cotton Association, ex-gin prices of cotton increased by 11.11 percent to Rs. 7,500 per maund to Rs. 6,750 per maund.

Furthermore, ex-gin prices of 40 kg. cotton also went up to Rs. 8,038 from Rs. 7,234 per 40 kg.

After a meeting held on 10th April 2018 by Federal Committee on Agriculture (FCA) targets for area and production of Cotton crop were set at 2.955 million hectares and 14.37 million bales respectively.

The major chunk of the entire targeted production – specifically 67.7 percent – expectations comes mainly from the agricultural province of Punjab. The target set for Punjab was at 10 million bales from a total land area of 2.420 million hectares in 2017-2018, whereas, production fellow the set target. During the year, Punjab produced 8.12 million bales of the cotton from 2.161 million hectares, missing the target by 1.88 million bales.

The other major cotton producing province is Sindh. According to the preliminary target set for the Southern province, a total of four million bales from 0.65 million hectares in 2017-2018 were ear marked from Sindh. However, Sindh also missed the target and produced 3.77 million bales from 0.612 million hectare.

Baluchistan, however, succeeded in achieving the target and consequently produced more than the target. FCA had set a production target of 0.038 million bales from 38 thousand hectares, against which total production from 0.092 million from 35.4 thousand hectares.

Cotton Balance Sheet shows that during the year 2017-18, cotton production rises by 12.27 percent to 11.98 million bales from 10.670 million bales in the year 2016-17

On the adverse side, with the rise in production the import of cotton doesn’t rise but it falls to 1.8 million bales from 2.706 million bales, instead exports of cotton increased in 2017-18 by 104.08 percent to 0.3 million bales.

The reason for failure in achieving the targets achieved by Sindh, Punjab can be mainly attributed to the rising Fertilizer prices, water shortage and lack of subsidies from Government to support the farmers.