By Farhan Sharif
March 9 (Bloomberg) -- Farmers in Pakistan, the world’s fourth-largest producer of cotton, may increase planting this year after domestic prices rose to a record and a global economic revival lifts demand from textile makers.
Output may increase to a record 16 million bales, Abdul Rasheed Khan, chairman of the Pakistan Cotton Ginners Association, said in a telephone interview from Multan today.
Pakistan produced 12.7 million bales this season, in line with the government’s revised target, compared with an output of 12.1 million bales last year, Khan said. The government had initially set a target of 13.5 million bales.
Domestic prices rose to a record 5,750 rupees ($68) for 37.32 kilograms (82.3 pounds) yesterday, according to the Karachi Cotton Association. Cotton futures for May delivery fell 0.39 cent, or 0.5 percent, to 82.04 cents a pound on ICE Futures U.S. in New York. The most-active contract reached a two-year high of 84.6 cents on March 1 as adverse weather reduced output in the U.S., the world’s largest exporter, and demand revived.
“Despite meeting the production target, local prices increased 50 percent this season, at a faster pace than the international market,” said Sohail Naseem, chairman of the Karachi Cotton Association. “The reason was demand was high as 16 million bales and the lack of hedging.”
Cotton is planted in Pakistan between April and June, and harvested between October and December. Pakistan produced a record 14.4 million bales in 2005.
Pakistan may need to import as much as two million bales this year to meet rising demand from textile makers, Khan said. Mills have so far bought 800,000 bales from overseas, mostly from India, he said.
Pakistan’s textile exports which accounts for two-thirds of the nation’s overseas sales, rose 2.4 percent to $5.95 billion in the seven months ended Jan. 31, according to the Federal Bureau of Statistics. The government plans to increase textile exports to $25 billion by 2014.