The ginning sector in the country will suffer if Ministry of Textile (MINTEX) fails to redress the demands of All Pakistan Textile Mills Association (APTMA).

“APTMA is the major buyer of cotton and we are interwoven bodies and in case of cease in textile activities, ginners will be hit hard,” Pakistan Cotton Ginners Association (PCGA) Chairman Rana Abdul Sattar said Tuesday.

Talking to Daily Times, he said cotton intake by the spinning and textile mills remained around 116,000 bales on each working day. Sattar said, “According to reports APTMA is going on strike, if the issue was not resolved within 10 days”.

This will put the ginners’ interests in endanger if the ginning and textile sectors observe shut down, he added.

He said the negation by MINTEX would hurt the ginners, spinners, mills and all stakeholders allied with the cotton industry, which constitutes around 66 percent of the country’s exports.

The cotton sector was already facing worst institutional agriculture credit crunch due to non-professional approach of creditor agencies and planners in agriculture ministry, Karachi Cotton Association member Shakeel Ahmad said.

“Besides others the cotton crop scrap percentage stands around 20 percent every crop season (2003-2010) due to wrong estimation and improper time disbursement process of agriculture credit to the growers,” Ahmad added. He said the cotton sector was facing around 35 percent of the total 65 percent credit demand and supply gap in the current fiscal 2009-10.

Institutional agriculture credit demand and supply gap has widened by 62 percent or Rs 419 billion as the demand has been estimated at Rs 679 billion, he added. The government has set cotton target at 13.36 million bales for 2009-10 against 14 million bales last year from 3.2 million hectares area, showing 4.57 percent lower production target.

The current consumption of lint stands at 15.5 million bales while the end users consumed around 12.7 million bales and are facing a shortfall of around 3 million bales this season, he added.

Cotton futures prices slipped nearly 0.5 percent Monday as the market consolidated off two-year highs in anticipation of a fresh batch of government supply and demand estimates. ICE Futures US cotton for May delivery settled down 39 points at 82.04 cents a pound. The contract has lost 3 percent since hitting 84.60 one week ago, the highest prices for cotton since March 2008.

Analysts said the USDA is likely to lower its outlooks for the domestic cotton production in the ongoing 2009-10-crop year, as ginning data is lower than projections.

Source: The Daily Times, Pakistan (March 10th 2010)