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Pakistan Cotton Revised Downwards

04 December 2012
USDA Foreign Agricultural Service

PAKISTAN - Pakistan’s MY (market year) 2012/13(August-September) cotton production is revised downward to 9.4 million bales (480 lbs), 15 per cent lower from the previous estimate of 11 million bales and six per cent lower than the 2011/12 crop.

The decrease in production is a result of a combination of adverse factors principally late water availability, shortages of electricity, weather, and disease.

Tight water supplies were a consequence of reduced water flow due to slow glacier melt, which was exacerbated as severe power shortages limited the ability of electric pumps to draw sufficient well water.

The issue was further compounded as high temperatures prevailed during the month of June 2012 – the peak cotton sowing/germination season– reducing the seeds’ viability, and stressing the plants to the point where they were more-susceptible than- usual to attacks of Cotton Leaf Curl Virus (CLCV) which manifested itself in greater numbers than last year.

Finally, torrential rains and floods during September affected the cotton growing areas of Punjab, damaging close to 80,000 hectares of standing cotton. FAS Islamabad estimates that approximately 1.0 million bales suffered considerable quality damage in the affected areas. There are growing concerns that the low quality cotton will be mixed with the rest of the crop, therefore reducing the overall quality of this year’s cotton supply.

In MY 2012/13 imports are revised upwards from 1.3 to 2.9 million bales to make-up for the shortfall in production, meanwhile exports have been revised downward by 20 per cent to 800,000 bales due to tighter exportable supplies.

In MY 2012/13, despite a significant reduction in production and a prevailing energy crisis, Pakistan’s textile consumption is estimated at 11.5 million bales.

Pakistan’s textile sector is anticipating increased trade after the EU Parliament approved concessions on customs duties for 75 items, mostly textile related. The concessions were granted to allow Pakistan’s economy recover from the devastating 2010 floods, and will be effective January 2013 for a period of one year.

The EU is Pakistan's largest trading partner, receiving almost 30 per cent of its textile exports - worth 3 billion Euros ($3.9 billion) – which accounts for more than 70 per cent of its total exports to the EU. According to trade sources, the concessions would increase textile exports by $150 to $200 million during the aforementioned period.

Based on this development, Post expects a 10 - 15 per cent increase of US Pima and upland cotton exports in MY 2012/13. According to the All Pakistan Textile Mills Association (APTMA), Pakistani millers prefer US cotton because it is cleaner and meets the quality characteristics for Pakistani cloth and textile products. Millers will pay up to $0.03/lb more for US cotton vs. Indian cotton due to quality.

Current low prices for US cotton will mean increased purchases according to APTMA, how much will depend largely on actual sales of textile products to the EU.

Further Reading

You can view the full report by clicking here.

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