Pakistan - Cotton production to cross 15mn bales in FY12
Dated- 06 Apr , 2012 - Pakistan
The cotton production is likely to beat the 15 million bales mark by end of 2011-12, surpassing the previous level of 14.7 million bales as of March 31, 2012.
The Cotton Crop Assessment Committee (CCAC) set the initial target at 12.2 million bales as the cultivation of BT cotton varieties in FY12 has been the major driver for this bumper crop this season. With this bumper crop it is expected that an uptick in the coming export numbers; however, it will not be enough to keep up with last year’s exports of US$13.8 billion.
The cotton prices in the domestic market have remained stable during 3QFY12 rising by 10% since hitting a low of Rs4,900 per maund in 2QFY12.
Currently, domestic cotton price is hovering around Rs5,400 per maund and have averaged Rs5,484 per maund in 3Q. Similarly, international cotton prices also have appreciated by 6% since December 31, 2011.
Pakistan’s textile exports in February 2012 were recorded at US$1.05 billion, down 12 %YoY however the same was up 6.5% on a MoM basis as raw cotton, cotton cloth and made up articles depicted growths of 10-82% in monetary terms.
The cumulative textile exports in 8MFY12 were recorded lower by 7.5%YoY at $8 billion which was mainly on account of lower cotton prices and decline in export volumes of cotton yarn and cotton cloth.
Although exports are likely to remain subdued compared to last year, recent uptick in cotton prices and better than expected cotton crop production is likely to provide a stimulus to textile exports during the remaining part of FY12. However, the prevailing energy crisis in the country is a great risk to meeting export orders by textile manufacturers.
In 8MFY12 textile exports were recorded at $8 billion, down 7.5%YoY while the exports grew on a monthly basis in February, lower cotton prices along with enhanced energy crisis in the country were major reasons for the fall in cumulative exports in 8MFY12.
Furthermore, slowdown in the European economies amid the recent debt crisis also put pressure on the export orders. All major categories witnessed a double digit decline in export quantities except raw cotton which witnessed a growth of 27.7%YoY as a result of bumper cotton crop in the country.