International agencies have projected higher cotton prices for the country's growers, which are expected to rise on decreased cotton production this season, but at the same time it would push the local textile industry to pay on raw materials.

The International Cotton Advisory Committee (ICAC) has suggested that the local growers capitalise on the emerging situation and warned the textile producers to prepare for the approaching alarming situation.

"Chinese cotton imports are forecast at a record 3.2 million tons in 2005-06, more than double of last year's figure," said an ICAC report issued recently and received here by the federal ministry of food, agriculture and livestock.

"This is expected to positively affect international cotton prices. The ICAC forecasts that cotton prices will average 65 cents a pound in 2005-06, up 13 cents from last season."

However, the committee said over the first four months of the current season, the cotton prices did not register any significant rise and averaged only 55 cents a pound.

The country's agriculture authorities have already predicted lower-than-target cotton production this year, which touched all-time high last season, mainly due to cut in per acre yield and decreased sowing area.

The Federal Committee on Agriculture (FCA), which met recently, was convinced that the production could fall to 12.5 million bales against the set target of 15 million bales, which encouraged the ICAC to predict higher cotton prices this season.

"World cotton production is estimated at 25 million tonnes in 2005-06, five percent less than last season, but still the second highest on record," said the ICAC.

"Production in Pakistan is estimated down 11 percent due to decreased yields, as the weather has been less favourable than last year," it said, but added the production in India was expected up three percent to 4.25 million tonnes due to increased planting.

The ICAC foresaw world cotton consumption at 24.4 million tons in 2005-06, which showed a four percent increase compared with last season as China was expected to account for 86 percent of the global consumption. The ICAC projection also reflected in regular cotton trading locally where prices have registered Rs 50 per maund increase and the trend is likely to continue in the near and long terms.

The spot rate released by the Karachi Cotton Association showed the cotton prices at Rs 2,400 per maund, but the textile mills say the contracts have also been signed at Rs 2,500 per maund. "It is natural, as the prices rise whenever there is a decline in production," said Jeth Anand Kohistani, a ginner and former chairman of the Pakistan Cotton Ginners Association (PCGA).

"Last season there was a bumper crop, which benefited the millers and now it's the turn of growers and ginners to book better profits."

He said the main reason behind declining production was cut in per acre yield, which had dropped to 669 kilogrammes and latest figures suggested 4.737 million bales of cotton had reached the ginning factories till Nov 1 compared with last year's 6.258 million bales.

The recent figures released by the PCGA said in 20 cotton-growing districts of Punjab a total of 3.33 million bales arrived at the factories compared with last year's 4.82 million bales on the same date, suggesting a steep shortfall of 48.11 percent.

Similarly, the PCGA said, in nine districts of Sindh, the production had been estimated so far at 1.44 million bales compared with last year's 1.43 million bales, showing a nominal decrease in output.

Dailytimes.com.pk