MULTAN, Oct 25: Cotton prices remain below the officially announced minimum procurement price of Rs925 per 40kg despite the much-hyped role of the Trading Corporation of Pakistan to ensure fair returns to growers.

Though phutti (seed cotton) prices have shown a slight upward trend during the last few days, analysts attribute it to the depreciation of rupee against US dollar rather than TCP's intervention.

Rupee has devalued by almost four per cent against dollar during the last week. Consequently, the prices of phutti and lint cotton have also increased - more or less to the tune of latest rupee-dollar parity.

The TCP on the other hand has been signing agreements with the ginners at a price of Rs 2,159 per maund (37.32kg) in order to at least ensure the growers the minimum official procurement price of phutti. But, despite the depreciation in the value of rupee the phutti prices in length and breadth of the cotton zone are yet to match the official price.

In the prevailing circumstances, the ginners are appearing to be the beneficiary of the TCP intervention rather than the growers. "Ginners are earning extra Rs50 to Rs100 per 40kg of phutti while dealing with the trading corporation," remarked a cotton market analyst.

One of the reasons behind the depressed phutti prices is speculations that the country is going to pick a surplus cotton production this year. The textile sector has recently projected its demand for the lint cotton at 13m bales while the federal agriculture minister Haji Sikander Hayat Bosan, in a statement, has forecasted 0.9m bales surplus bales against the domestic need.

The speculations gained weight with the cotton arrival figures the Pakistan Cotton Ginners Association released on Oct 18 last, which showed 53.58 per cent increase in the cotton arrivals at the ginneries as against the last year.

Of the phutti arrived for 3.61m bales of lint cotton by Oct 15 last at the 845 working ginneries, 3.04m had been ginned into bales having a total weight of 446,448,670kg. If one calculates the average weight of the ginned bales, it appears to be 146kg against the standard bale weight of 170kg. Hence, a difference of 429,461 bales has become evident in the PCGA arrival figures.

Moreover, picking in the cotton fields this year also started before time due the early maturity owing to dry and hot weather. Therefore, basing the speculations about the crop size on deceptive PCGA figures besides ignoring the factor of early maturity will be misleading and amounting to an organized bid to keep the cotton prices depressed when it is with the growers.

Agriculturists say that neither the researchers have introduced varieties to kindle hope for an extraordinary production nor the area under cotton this year increased to that extent.

Meanwhile, there are reports that the millers have again started spinning coarser yarn of less than 20 counts due to the availability of cheap raw cotton in the domestic market this year.

During the last few years, they had switched over to the spinning of yarn of higher counts in order to compete in the international market at quality because they had to buy raw cotton from the local market at prices identical to that of the international market.