Cotton arrivals far below FY13 target


According to ginners, cotton arrivals till May 1, 2013 stood at 12.92 million bales against 14.81 million bales during the corresponding period last year.
Initially the government had set the cotton production target of 14.6 million bales for the financial year 2013 (FY13) season.
However, the production figure implies a decline of 12.8% year-on-year (YoY), said market analysts. According to Pakistan Cotton Ginners Association (PCGA) data, cotton arrivals during the current season remained subdued posting a decline of 12.8% YoY.
“The main culprit behind this phenomenal decline in the total cotton arrivals of the country was heavy rainfall in lower parts of Punjab during the season causing the arrivals to slide by 22% YoY to 9.51million bales, with Punjab contributing 82% to the total cotton arrival last year,” said InvestCap analyst Abdul Azeem.
However, the analyst said, improved water availability in the Sindh, supported the overall cotton production in the province. The cotton arrivals in the province grew by an immense 27% YoY to 3.41million bales, he said.
With clarity on the cotton supply front at the end of the season, average cotton prices on the local front have posted an increase of 3.61% YoY to Rs 6,027 per manud (1 maund = 37.5 kg). During April, 2013, cotton prices remained subdued, declining by a minimal 0.7% month-on-month (MoM) to Rs 6,739 per maund.
However, during April, 2013, it touched the 18-month high of Rs 6,900 per maund. On the international front, average cotton prices have reduced by 18% YoY to 86 cents per pound as of May, 3, 2013. During April 2013, Cotlook A Index declined by 1.8% MoM reaching 92.79 cents/lb.
Abdul Azeem said the better yarn price on international and local front was expected to be beneficial for some companies, NML and NCL in particular, as they had already purchased their stock of cotton required for the next season.