homeTitle.gif
  •  
  • The structure and characteristics of the domestic cotton market

    Chapter 6 - Market profiles - Pakistan 

     
     

    The importance of cotton in Pakistan’s economy

    Cotton and cotton products represent 61% of Pakistan’s export earnings. Textiles are linked to the country’s economic growth. The cotton consumption growth rate during the last five years was 5.7%, while the economic growth rate was 7%.

    Pakistan has the third-largest spinning capacity in Asia, with over 10 million spindles and 200,000 rotors. Based on historic expansion in the textile industry, the All Pakistan Textile Mills Association (APTMA) projects that capacity will increase to 15 million spindles and textile exports to US$ 15.5 billion by 2010. According to APTMA, fibre consumption at present is 2.4 million tons, comprising 1.9 million tons of cotton fibre and 0.5 million tons of man-made fibre (MMF), the mix ratio being 79:21 compared with a global ratio of 40:60.

    Local cotton production by 2015 is projected at 3.5 million tons. APTMA estimates that the textile industry’s raw cotton requirements by 2015 will be 3.4 million tons, consisting of medium staple (66%), long staple (26%) and extra long staple (8%). Long and extra long staple requirements are met through imported cotton; hence Pakistan is a potential market for exporters in this category. Details of APTMA’s Textile Vision 2010 are shown in table 6.5.

    The reduction in exports from the spinning and weaving sectors is countered by a sizable increase in value-added sectors such as bedwear, knitwear, readymade garments and finishing. The Government is helping the industry to diversify towards value-added exports.

     

    6.5.1-en1
     

     

    National production

    Cotton is cultivated in two provinces: Punjab, which produces 79%, and Sindh, which produces 20%. Negligible quantities grow in the remaining two provinces, North-West Frontier Province (NWFP) and Balochistan.

    Cotton production since 2000 is shown in figure 6.15.

    Pakistan ranked fourth in world cotton production and third in world cotton consumption in 2005/06 with shares of 8.5% and 9.6% respectively. Cotton yarn production and exports enjoy second and first positions with 8.9% and 23.8% shares, while cotton cloth production and exports are in second and fourth positions with global shares of 14.7% and 11.0% respectively.

     

    6.5.1-en2 

     

    Source: Ministry of Food, Agriculture and Livestock, Government of Pakistan.

    Note: T = target.

    Market size and prices

    There is a positive correlation between domestic prices and international prices (coefficient 0.9), and the benefit of international market prices is passed on to the grower. Prior to 1999/2000, prices of both seed cotton and lint were determined on the basis of variety. However, from 2000 onward, local prices have been determined on the basis of grade, as approved by the Pakistan Cotton Standards Institute.

    To support growers, the Government announces minimum assured prices for seed cotton every year. Though seed cotton market prices have remained above the support levels, they have shown erratic behaviour. From a peak in 2003/04, there was a decline in prices in 2004/05 due to record cotton production at home and globally. Large imports also dragged local prices down. Seed cotton and lint prices are shown in figures 6.16 and 6.17.


    6.5.1-en3 

     

    Source: Ministry of Food, Agriculture and Livestock.

    Prices from 2000/01 onward are for Base Grade-3 with staple length 1-1/32".


    6.5.1-en4 

     

    Source: Karachi Cotton Association.

    Prices from 2000/01 onward are for Base Grade-3 with staple length 1-1/32", Micronaire 3.8–4.9 NCL.

    Cotton qualities supplied by the domestic industry and from abroad

    Local production is mainly composed of medium and medium long staple with a maximum staple length of 29.8 mm, and meets 85% of the mill requirements. In 2004, CIM-707 was developed with a staple length of 32.2 mm, micronaire 4.2 and strength (tpsi) of 97.5, but its production is small. Long and extra long staple cotton is imported to spin higher counts for export markets. Medium staple cotton is imported when supply is short in the local market.

    Major commercial varieties grown and marketed are CIM-446, CIM-496, FH-1000, BH-160, NIAB-999, NIAB-111 and ALSEEMI-151. Cotton breeders are motivated to give due emphasis to optimal micronaire and strength besides increasing staple length to enable the textile mills to spin higher count yarn from local cotton.

    Supply and demand in the national market

    The supply and distribution of cotton have increased during the last five years because of higher production, consumption and imports. Production and consumption are both estimated at 2.2 million tons during 2005/06 and imports at 390,000 tons. While production and consumption increased by 22.5% and 23.5% respectively in the last five years, imports increased substantially by 109% during the same period. Major imports in 2005/06 were from the United States, Brazil, India, Egypt and Australia, as shown in figure 6.18. Cotton arrives in Pakistan from 95 origin countries. During 2002–2005, Pakistan was the top buyer of United States Pima cotton. In 2005/06, Pakistan was the biggest buyer for Egyptian long and extra long staple varieties. Pakistan spinners also imported African cottons, mainly from Angola, Botswana, Ghana, Morocco, Niger, Mali, Mozambique, Benin, Côte d’Ivoire, Burkina Faso and Togo. The qualities ranged from strict low middling to middling. There has been a substantial decline in imports from West Africa according to shipment data compiled by the Federal Bureau of Statistics.

     

    6.5.1-en5 

     

    Imports (mainly long staple cotton) have also grown over the last five years, as shown in figure 6.19. An overview of cotton supply and consumption is given in table 6.6 (see page 287).

     

    6.5.1-en6 

search
  • contentblockheader
    Cotton Exporter's Guide

    Brochure - African cotton promotion
  • Region:
    Country:
    Type:
    Date from:
    Date to: