Water scarcity, frequent power outages, short supply of fertiliser and a lingering dispute between millers and cane growers on pricing have hit the kharif crops this year, and initial production estimates of cotton are confusing. Cane cultivation is lower and rice is set to give a bumper output.

“Water scarcity delayed cotton sowing’’, informed Sohail Mahmood, a leader of ginners from Multan, on telephone. ‘’Frequent power breakdowns too hampered water pumping from tube wells, and there was not enough fertiliser”, he added.

Amjad Rasheed, who has an interest in textile business, said that area under cotton cultivation is lower by 10-11 per cent but the crop is good. The crop estimates vary between 11-12 million bales that also depends on weather conditions in Punjab in next few weeks.

The growers’ dispute with millers on price and quality, payment delays and finally the prospects of getting a better return on other crops have forced farmers to cut down heavily on cane cultivation and opt for other crops. “Cane cultivation area is less in Sindh but crop is good’’, Sindh Agricultural Secretary, Subhago Jatoi disclosed. A large number of farmers were tempted to cultivate rice mainly because the crop offered them handsome return. ‘’Farmers in Sindh got as much as Rs1,200- 1,300 a maund last season on non -Basmati rice’’, Subhago Jatoi said.

Rahim Janoo, a senior leader of Rice Exporters Association of Pakistan, said the farmers got about Rs400 for a maund in the initial period of last season but as international demand for rice mounted, prices went up to Rs1,200 per maund. No wonder then the price shot up to about Rs80 per kilogramme or more for Basmati and Rs50 for IRRI.

Janoo attributed sudden spurt in international rice demand last season to a panic caused by some international food organisations that left no choice for countries like Iran, Saudi Arab, Kuwait, UAE, Qatar and many African countries to build up buffer rice stocks. The international demand prompted countries like India to impose a ban on rice export as they feared a serious scarcity of grain in domestic market. Jodia Bazar merchants believe it was a gimmick played by the global food merchants who have a knack of creating a crisis and then making quick money out of it. Estimates for rice crop also vary. Some rice exporters estimate it at even seven million tons, indicating that about four million tons would be available for export to fetch $2 billion this year. But there are many in REAP who do not endorse this assessment and believe that crop output would be six million tons plus. They have also doubts about the international rice demand matching that of last year.

There may be demand for non-Basmati in Africa, Bangladesh and few other countries but affluent countries like Saudi Arabia, UAE, Qatar and Kuwait are not likely to add much to their demand. Traders in local market doubt if they would be able to bargain at last year’s prices.

Economists say that kharif crops have a special significance in the national economy. Agriculture constitutes about 21 per cent of GDP and the crops’ contribution is anywhere from 10-11 per cent. The kharif cash crops have a major role with almost seven per cent direct share in the overall economy But what is more important is that these crops sustain key industries--textile and sugar--and also a very big chunk of national and international grain trade.

“Crop estimation is speculators’ game rather than an accurate monitoring by satellites ‘’, remarked a top leader of textile industry who wondered as to why a ‘patwari’ still remains the only source of information on crop estimates. Cotton prices fluctuate in the market on reports of crop estimates, infestation reports and pest attacks and therefore textile industry wants a modern and a well-equipped institution, whether public or private to do the estimation job.

Cotton picking has started in lower Sindh and a few ginneries have started reporting arrivals but there is no indication of any meeting of Pakistan Central Cotton Committee (PCCC). The Crop Estimation Committee of Karachi Cotton Association has yet to meet. Bankers report that not many textile business people have come with demands for sanctioning credit limits even when two weeks of September have passed and it is entering its third week. Normally, the textile business starts approaching banks for their credit limits from the middle of August to buy cotton from the ginneries.

“Domestic spinners’ demand is for 16 million bales of cotton,’’ Anwar Tata, a former Chairman of All Pakistan Textile Mills Association, said and recalled that in the outgoing fiscal about three million bales were imported. “But many mills are closing down for different reasons and I would not be surprised if a reduced cotton production of 11-12 million bales will be more than enough for us’’ he replied when asked to indicate cotton import requirement for 2008-09.

With only two weeks left for the commencement of sugar crushing season from October 1, there are no indications as to when the actual crushing will begin this season. “We plan to hold a stake holders meeting soon about commencement of sugar crushing’’, Sindh’s Agricultural Secretary Jatoi said.

Industry sources indicate possibility of half a million tons of sugar import in 2008-09 for building up a buffer stock to keep prices stable. There is fear that sugar prices may touch Rs40 a kilogramme this year. “The government had not much time to address kharif crops issue,’’ an official conceded but added that there was enough time to look towards Rabi and for wheat crop. The government intends to announce support price-Rs900-1,000-per 40 kilogrammes of wheat immediately after Eid, according to indications here.

“Such an announcement is bound to impact the current wheat flour prices,’’ he said. However the government would take necessary administrative steps to keep prices within control.

Crop estimate vary from growers to traders, fueling speculations in commodity prices.