With rising cotton prices, farmers are encouraged to increase inputs, therefore, production is expected to soar in Pakistan this year, US officials claim. Despite trimming its estimate of harvested area to the lowest level in three decades, the US Department of Agriculture (USDA)'s bureau in Islamabad upped its forecast for production of cotton.
According to the bureau rising cotton prices are prompting farmers to more actively manage insects, resulting in higher expected yields compared to a year ago when low cotton prices prompted farmers to curb input costs despite reduced planted area. The bureau has forecast cotton production in Pakistan would be at 8.25m 480 lb bales, up 250,000 bales from the earlier estimate and up 18 per cent year-on-year. Prices remained low at the time of planting this season, between May and July, prompted farmers to cut sown acres to their lowest levels since 1985.
The bureau saw harvested area this year at just 2.40m hectares, down from an official USDA estimate of 2.50 m hectares, and well below the 2.80 harvested last year. But cotton prices have been rising with the bureau reporting that seed cotton prices now stand at 37 cents a pound up some 48 per cent year-on-year. Thus where last year farmers cut costs by reducing pesticide application that resulted in tanking yields of the commodity, now there is a strong incentive to grow cotton.
Based on updated figures, the bureau has forecast cotton yields at 3.4 bales per hectare compared to 2.5 bales per hectare in 2015-16, an increase of 36 per cent. But despite the stronger production, with consumption remaining essentially flat at 10.33m bales, the bureau actually upgraded its forecast for imports by some 200,000 bales.