Pakistan’s cotton economy — a major source of export revenues and jobs — is in a mess. This is obvious from the failure to meet the national cotton sowing targets for the past few years now and the expanding gap between the domestic industrial demand for the silver fibre and the stagnating crop output.

The country is set to miss the cotton sowing target of 7.9 million acres by 15-20 per cent this year if unofficial estimate of sowing in Punjab and Sindh is to be believed.

“In Punjab which produces more than three-fourths of the national seed cotton output, only five to 5.3 million acres have so far been brought under cultivation against the target of 6.2 million acres for the next crop. That shows just below 17 per cent gap between the cotton sowing target and the actual achievement,” the AgriForum Pakistan chairman, Mr Ibrahim Mughal told Dawn. Similar reports have been received from Sindh, he added.

“Cotton sowing in Punjab, particularly late sowing southern districts, have faced numerous difficulties - canal water shortages until a month ago, spiking cost of tube-well water for irrigation due to higher power tariffs and rising price of diesel, and long power cuts,” says the Punjab Agriculture Extension Director General, Mr Mohammad Anjum Ali.

But he is confident that the cotton sowing target would not be missed significantly in Punjab. “We have already achieved above 88 per cent of the sowing target. We will definitely surpass the 5.99 million acres covered last year, even if we don’t meet this year’s target,” he said.

But official estimates of cotton sowing proved wrong last year and there is no guarantee that they wouldn’t this year. “Farmers have no other choice but to sow cotton. Canal water shortages and cost of running power and diesel tube-wells has prevented them from switching to rice and sugar cane this year,” Mr Ali said.

“The cotton situation changed every 15 days. It is heavily dependent on weather, which has been favourable so far. Thus it is not possible to exactly forecast crop’s future at this point of time,” he added.

Mr Mughal points out that the government’s failure to announce an intervention price had kept many farmers from sowing cotton in Punjab and Sindh. Besides, growers could not obtain sufficient quantities of proper seed for sowing. Unlike Mr Ali, he holds that growers in the cotton growing areas had switched to rice this year.

The shortfall in the cotton sowing area means that the country would again miss the production target of 14.11 million bales (each weighing 155kg) - 11 million bales from Punjab and three million from Sindh for this season like the previous year. Balochistan and the NWFP together are expected to contribute 0.110 million bales.

The total cotton crop output was 20 per cent lower to 11.655 million bales than the target of 14.2 million bales last season. Because of the substantial drop in the domestic cotton production against the industry’s need of 15.5 to 16 million bales, the textile mills spent over $1.2 billion to import 4.2 million bales cotton (of 170kg each) in the first 11 months of the current year to May to meet their consumption requirements.

The dollar value of cotton imported this fiscal is 122 per cent higher from the previous year’s $562 million. In terms of quantity too the cotton imports have more than doubled from the last financial year.

“That is a huge burden on the industry as well as on the country’s depleting foreign exchange reserves,” said a spinner in Lahore. He said the dip in the cotton output meant a spike in its prices. While early arrivals of seed cotton from Punjab are being traded at around Rs2100-2200 per maund, the lint is available at above record high rates of Rs4100 per maund (37.23kg).

“This is simple madness. The market has gone crazy over the last one year. But it was expected due to short crop and because the commodities remain strong around the globe. That said, the raw material price, which is almost 70 per cent of our total production expense, is sending our overall cost of doing business through the roof. With the domestic production likely to remain below the target this year too, there is little chance of cotton price to come down,” the spinner said.

The hiking cost of doing business on account of rising energy and credit price and other factors, and weakened demand and financial crunch in the global markets has caused 2.5 per cent drop in the textile exports to $9.59 billion from the previous year in the total textile exports during this fiscal to May. Also the share of textile exports has dropped nine per cent to 56 per cent in the total export revenue. The trade policy for the outgoing year had estimated the textile share to be around 63 per cent. Investment in textile machinery has fallen to $406 million this year from above $900 million in 2005.

“Our export sector is in a crisis and we have failed to take advantage of rising global commodity prices and our trade gap is ballooning. If we want to push our exports and narrow the trade gap we shall have to focus on the textile sector for early results. But you cannot expect the textile industry to grow without developing your cotton crop both in quality and quantity by raising per acre yield from the current level of about 22 maund per acre” the spinner said. India did it and has become a net raw cotton exporter. He said huge contamination in domestic cotton meant an average price discount of 10 per cent for the buyers.”

“As long as we remain cotton deficient textile industry we will not be able to reduce our raw material cost, expand production and enhance exports substantially,” the yarn exporter said.