Cotton arrivals jump 74pc y/y, surpass last year’s total

LAHORE: Cotton arrivals surged by nearly 74 percent year-on-year to 8.024 million bales as of December 15, boosted by favourable weather and higher yields in the main producing provinces of Sindh and Punjab, industry data showed on Monday.

The Pakistan Cotton Ginners Association (PCGA) said in its fortnightly report that the arrivals were significantly higher than the 4.613 million bales recorded in the same period last year, when heavy rains and floods damaged the crop.

The PCGA said the arrivals also increased by 3.5 percent from November 30, when they stood at 7.753 million bales.

Sindh has contributed 4.066 million bales, up 87 percent from last year, while Punjab produced 3.596 million bales, up 64 percent from last year, the report said. The report showed that by December 15, 2023, with 8.024 million bales arriving, output has significantly surpassed last year's total of 4.912 million bales.

As of mid-December 2023, 289,326 bales were sold to exporters/traders and textile mills bought 7,084,870 bales. With the 2023-24 crop nearing its end, fortnightly flow has declined from a peak of nearly one million bales to 270,234 bales. Currently, 302 ginning factories are operating in the country. Sanghar District in Sindh leads the country with 1.681 million bales, followed by Bahawalnagar in Punjab with 1.013 million bales. Last year, Bahawalnagar had a harvest of 0.622 million bales by the end of the season. Cotton production in the traditionally high-yielding district of Rahim Yar Khan faltered to 0.584 million bales.

Sukkur district in Sindh secured fourth position with 0.543 million bales, while Bahawalpur has produced 0.531 million bales this season. Last year, Sukkur and Bahawalpur produced 0.278 million and 0.358 million bales respectively.

Following a 14.6 percent decline in Pakistan's finished textile product exports in 2022-23, overseas demand is forecast to rebound in 2023-24. As a result, consumption is expected to reach 10 million bales. However, continued currency fluctuations and rising energy and other input costs may hinder further expansion. With improved production this year compared to the abysmally low output of less than five million bales in 2022-23, cotton imports are expected to be lower. Conservative projections suggest imports could be between 4 and 4.2 million bales. Despite the anticipated increase in domestic consumption, the expected rise in domestic production will likely offset the need for increased imports in 2023-24. Trade data shows imports were 4.5 million bales in 2022-23.

The decline in local cotton prices within the free trade regime has created export opportunities, prompting an increased forecast of 100,000 bales for 2023-24.