Boosting tobacco and cigarette exports

COMPLEXITIES of export of tobacco and its products are well known. Peculiar feature of tobacco trade is that the US, being a big exporter of tobacco, is the leading importer of the commodity needed for blending purposes. Quality of tobacco and its prices are the principal factors in international trade.

During the fifties Pakistan used to import tobacco for meeting the demand of its cigarette industry. Cultivation of flue-cured Virginia was started on experimental basis over about 20 acres in 1948. And, self-sufficiency in tobacco for use in low brands cigarettes was achieved during 1969-1971, but the country used to import large quantities of good quality tobacco for use in superior brands cigarettes.

With a view to reducing dependence on the import of good quality tobacco leaf, the Pakistan Tobacco Board, in collaboration with the tobacco companies, intensified research and development activities and explored the soil and climatic conditions in the sub-mountain areas of Mansehra, Buner, Swat and Dir districts to meet the quality requirements of cigarettes for domestic use. And, all the tobacco consumed by the tobacco companies for cigarettes was produced in the country except for a nominal quantity which was imported for use in superior brand cigarettes towards the end of 20th century.

One of the functions assigned to the Pakistan Tobacco Board (PTB), under the provision of relevant law, is to regulate, control and promote export of tobacco and tobacco products. The PTB is not directly involved in the purchase/export of tobacco. Tobacco and its products are exported mainly through the tobacco companies while some traders are also involved in it.

The attached table depicts exports/imports of tobacco and its products during the last five years.

It will be observed from the above table that there has been generally a decline in the total value of export of tobacco and its products whereas the values of imports of tobacco and its products have registered a steep rise.

The imports have outstripped the exports. The matter, therefore, needs an earnest consideration of the concerned authorities.

However, it is heartening to note that export of tobacco and its products has gained momentum in 2009-10 to reach Rs1400 million. Hence, there is a strong need not only to maintain this rising tempo but also to excel it.

Areas for improvement/steps for export promotion

• Establishment of an export promotion cell in PTB staffed by professionals.

• Fixing export targets in consultation with all stakeholders and monitoring thereof.

• Creation of institutional capacity among manufacturers and growers in respect of quality, standards, testing and marketing.

• Sending of growers and manufacturers delegation abroad.

• Promoting growers to export.

• Participation in international exhibitions on tobacco.

• Providing common facilities, etc. like modern curing facilities, modern re-drying facilities to small growers for exports.

• Providing training to growers and dealers in export.

• Survey of new markets/market diversification.

• Bringing all growers on one platform/one association.

• Activating Pakistani embassies and trade offices abroad to promote tobacco exports.

• Fertilisers companies to make available compound fertiliser for tobacco growers and PTB, in consultation with all stakeholders, to devise a system for ensuring easy availability, financing and recovery procedures.

• Extension of export finance facility to tobacco exporters.

• Preparation of training programme for growers by multi-national tobacco companies in liaison with PTB/SMEDA in export packing and allied activities.

Sugar, cotton prices fall

THE Karachi wholesale commodity markets last week consolidated their previous gains as commercial houses remained active buyers at the current levels, mainly on export counters under the lead of wheat.

Among essentials, wheat prices rose further by Rs20 per maund followed by renewed buying by exporters and local flour mills. Basmati kernel and basmati were also quoted higher by Rs10-20 amid active local trading.

On the other hand, sugar remained under pressure and was marked down for the consecutive third week and was quoted lower by Rs20-40 per maund.

The notable feature of the week was that cotton prices fell from the recent all-time high of Rs13,000 per maund to 11,000, showing a decline of Rs1,000-2,000 per maund depending on the quality of lint in trade, dealers said and added prices were still higher and were well above the export parity level of the textile sector.

The fall was attributed to crash of New York cotton futures markets where both the maturing March and the ruling May contracts ran into speculative selling from the same set, which caused the recent price flare-up. Both the contracts late in the week quoted lower around 184 and 183 cents per lb.

Dealers said although wheat prices remained stable around previous levels as some local private sector exporters covered their forward positions to maintain shipment deadlines.

An idea of physical shipments to various countries under forward deals may well be had from the fact that three ships were on the port loading well over 0.110m tons of the commodity and some more were awaiting berths, they added.

Market sources said bulk of the activity on the wholesale market was confined to both leading export commodities including rice and wheat but prices remained stable around previous levels as supplies from upcountry markets were fairly steady, they added.

Unlike previous weeks, industrial sector also showed lively trading as some big houses remained active buyers both at the rise and fall to cover their forward positions to meet their near-term consumption requirements.

News from the sugar front was satisfactory followed by reports of fall in prices and active ready business by both commercial houses and some speculative traders, brokers said.

However, the fall in prices of sugar was modest that too at the wholesale level but there was no change in the ready section at the retailers end, they added.

On the other hand, wheat maintained a steady posture on reports of steady exports and strong presence of private sector exporters on the market to build-up stocks against fresh export allocations.

On counters of other essentials, prices of pulses remained steady and did not show much change despite reports of fresh arrivals of imported stuff including shipload of chickpeas over the week, dealers said.

The cereal sector, which showed sharp rise last week, remained dormant as prices of most cereals were held at the last levels amid active ready demand from local consumers, they added.

But some of the imported stuff did not show any easing as prices of most of the essential items remained on the higher side and importers were not obliged to further lower their selling prices, they said.

Despite steady physical shipments of wheat under forward deals to various destinations, its prices on the wholesale markets remained stable and did not show any rise.

Rice shipments were also maintained on the higher side as the private sector exporter remained active buyers against forward sales from the open market but prices did not show much change.

However, news from the cotton front was a bit encouraging as local prices after having gone up to an all-time high of Rs13,800 per maund on credit started to fall during the week and were quoted at Rs11,800 as spinners and mills did not chase prices higher and kept to sidelines, industry sources said.

Price changes were, however, normal as buyers and sellers kept to sidelines as the markets were closed and no business was reported from some of the leading markets in the southern Punjab, dealers said.

Double Cotton Yield Planned in Punjab

LAHORE, Feb 23: Punjab plans to double its cotton production from eight million bales to 16 million bales by 2015 by ensuring best biotech seeds to farmers and better extension services, says adviser to chief minister Zulfiqar Khosa.

Speaking at the 5th meeting of the Asian Research and Development Network, Khosa said the government paved the way for biotech seeds by enacting bio safety laws. They led to the approval of eight varieties of local BT cotton. Punjab is negotiating with Monsanto for the latest biotech seed varieties.

The three-day international conference of research scientists has been organised by the government of Punjab, International Cotton Advisory Committee and CABI. More than 50 delegates from 15 countries are participating in the conference.

Head of ICAC research wing Dr Muhammad Rafiq said in his address that unusual increase in global cotton rates this year rattled experts. The price was expected to increase further. Unfortunately, the cotton crop needed use of more insecticides than other crops. This high use, however, had been reduced by pest-resistant BT varieties. Global pesticide use on cotton dropped by 26 per cent in past one decade. On the contrary, it increased in Pakistan.

He said this year 62 per cent of all cotton cultivated in the world was from BT cotton seeds. “We can do away with insecticides by developing the required technology. The pest attack has been rising, which can be controlled by developing fertiliser and water efficient and pest resistance varieties,” he said.Provincial Agriculture Secretary Arif Nadeem said it was unfortunate that “uncertified BT cotton seeds infiltrated our farms and devastated farmers. With the approval of tested varieties, the extension department would be able to advise farmers on use of each of the eight approved varieties.”

Pointing to the potential of production, he said currently the country was losing two million bales annually to curl leave virus, two million bales to attack by other insects and one million bales to water shortage. With the introduction of pest and virus resistant varieties, most of the damage could be averted.

Chairman of All Pakistan Textile Mills Association (Aptma) Gohar Ejaz said the cotton production had declined from 700kg per hectare in 1992 to 560kg per hectare this year, while China increased its cotton productivity from 700kg per hectare a decade ago to 1,200kg now. India reached the same productivity level as that of Pakistan from 300kg per hectare in 2004.

CEBI Director Dr Julie said 45 per cent of cotton in Pakistan was cultivated by farmers having less than five acres of land. Management of primary pest and diseases increased the incidence of secondary pests that needed attention of cotton scientists.

Irrigation mode for better mango fruits

A PROPER irrigation of mango orchards is vital to prevent fruit drop and help improve young fruits. Additional irrigation at the ripening stage results in a significant improvement in both fruit size and quality.

The success of mango orchards largely depends on method and management of irrigation. Proper irrigation scheduling, especially during the period of plant growth and fruit development, plays vital role in the sustainability of orchard.

The objective of irrigation is to apply the required quantity of water as per tree requirement at the right time. The frequency and amount of irrigation need depends on the type of soil, its properties, prevailing climatic conditions, rainfall and distribution, age and size of trees.

Mango tree is evergreen grown in tropical and subtropical regions of the world. Due to its superb juicy, tasty and colourful fruit, mango is known as the ‘king of fruits’.

In Pakistan, mango is grown over an area of about 10,000 hectares with an annual production of around one million tons. Pakistan ranks fifth with four per cent of world’s total mango production.

Mango tree is considered drought resistant to some extent; however soil moisture influences the fruit size, quality as well as the drop of immature fruits. Under hot and dry climate, irrigation prevents drop of immature fruits during fruit development period. It is also observed that moisture deficit in soil results in early maturity to fruits resulting in poor quality. Properly irrigated trees have fruits of better size and juicier than those trees with soil moisture deficit.

Mango orchards are usually irrigated by conventional methods such as flood, basin, ring and furrow. However, some of the progressive growers have changed irrigation strategies and now they are irrigating their orchards with modern micro-irrigation methods such as drip and under tree sprinkler system. Each system has advantages and disadvantages, as one system may be suitable for one set of conditions but unsuitable for another. Therefore, proper selection of an irrigation method is imperative for better yield and quality of mango production.

The water requirement of a mango tree increases with the increase in the age of a tree and becomes constant when the full canopy has been developed at the age of about 20 years to 25 years. In light soil (sand to sandy loam) irrigation frequency should be more than in heavy (clay) soils. The more sandy and gravelly the soil, the more frequent irrigations it needs.

Depending on soil type, climatic conditions, plant density, variety, size and age of trees, the annual water requirements vary from 50 to 400 liters/day/plant. Plant water requirement increases dramatically during fruit development. The moisture can be extracted by plant within 2-7 days depending on soil type, age of tree and climatic conditions.

As per mango tree phenology, there are five stages of life cycle viz. flowering, fruit development, vegetative growth, root development, and dormancy. About 80 per cent water is required by tree during flowering and fruit development stages. It is advisable to stop irrigation at least 10 to 15 days before harvest. Irrigation during maturity will stimulate growth of new buds and leaves resulting in poor fruit quality.

During visits of various mango farms located in outskirts of Hyderabad city it was observed that mango trees were facing dry stress at some farms which were irrigated with under tree sprinkler irrigation system having 3-4 jet sprinklers per tree. Due to lack of proper design and management, the system did not deliver the required quantity of water to the entire diameter of the canopy. Only about half of the diameter of canopy cover received the required water (field capacity), while remaining area was under water deficit.

Application of water only on half of root’s lateral spread did not meet the requirements of the tree at maturity under the scorching heat of Sindh. Thus, plant leaves appeared unnourished with wilted tips. Lack of required moisture content in root zone caused higher fruit drop, poor fruit quality and lower yield.

While selecting an irrigation system, it is advisable to consider available water resource, soil type, age and canopy of tree and climatic conditions of the area. Basin system has given better results where sufficient water is available. It is advisable to irrigate the entire soil surface up to plant canopy. With limited water resources and climatic conditions where annual evaporation is higher than annual rainfall, drip (trickle) irrigation is more appropriate than that of under tree sprinkler system.

It is better to make sure that the irrigation system is designed to deliver the seasonal and peak water requirements throughout the life span of the irrigation system.

Technical staff to run the system should have quantitative knowledge of tree water requirements and relationships among soil, water, weather and plant characteristics for proper irrigation scheduling and management. It is also advised to flood irrigate once the entire land of orchard with so as to avoid any salinity development at the periphery of canopy due to drip irrigation.

Bumper wheat crop likely in Sindh

WHEAT sowing in Sindh has surpassed the target, and chances for bumper production are bright provided the standing crop receives final doses of water and urea preferably before the end of February.

Wheat harvest usually begins from mid-March in lower Sindh, and is in full swing in April in upper Sindh districts.

In October, the Federal Committee on Agriculture had set production and sowing targets for Sindh at 3.682 million tons and 10,31,000 hectares respectively for the ongoing Rabi season.

Sindh Agriculture Department officials claim that wheat sowing in the province has crossed the target. “Till February 10, the crop had been planted on around 10,81,000 hectares, while cultivation will continue till mid-March, easily touching 11,00,000 hectares,” said Ashfaq Ahmed Soomro, additional secretary, Sindh Agriculture Department.

Officials say that owing to vigorous wheat cultivation activities in districts on the right bank of Indus River, wheat production target would be easily achievable. “We are expecting some 3.8 million tons of crop against 3.682 million tons for the current Rabi season,” they said.

For the ongoing Rabi season, per acre yield target was set at 36.1 maunds. But, Bashir Thebo, Director Statistics wing, Department of Agriculture, said average per acre yield was expected between 40-50 maunds; An average of 60 maunds in some areas, where quality of land was better, and farm inputs were timely available, was also being expected.

“Favourable climatic conditions, availability of quality seeds and fertilisers and luckily no viral attacks are other major positive factors behind vigorous sowing and higher acreage.”

There are also other factors behind the robust sowing such as: “Plans drawn up carefully for achieving the target were implemented in time. All farm inputs and other facilities were made available to growers at market price in proper manner to facilitate cultivation in maximum area,” said Asfaq Ahmed Soomro, additional secretary of the department.

Additional general secretary of the Sindh Chamber of Agriculture (SCA) Muhammad Hussain Khushik warns that the crop may post a decline of 25 per cent if the crop fails to get essential last doses of water and urea in time.

“The recent 23-25 per cent increase in prices of urea and DAP, may leave no option for the growers – particularly small farmers – but to avoid the essential doses,” he feared.

According to the Federal Bureau of Statistics (FBS), in December a urea fertiliser bag of 50kg was selling at Rs850 in most of the wheat growing districts of the province.

But, at present it is being sold at Rs1,200 per bag and reportedly at Rs1,250 per bag in some upper Sindh districts. Besides, DAP prices have also gone up by Rs150-200 per 50kg bag in the past two months. At present, a DAP bag is selling at Rs3,200, the FBS reports says.

LOOMING FOOD SECURITY

THE serious food, fuel and financial fluctuations of 2008, which bred food insecurity among the world’s poor and pushed over 30 million more down the poverty line, are returning to the world markets, says the World Bank.

The bank has warned that grain prices, which are already either close to 2008 peak or have crossed it, will retain the trend for next five years – up to 2015.

Wheat prices, which once peaked at $439 per ton during March, were largely around $350 per ton throughout 2008. Currently, the price has touched $378 per ton and is rising. It was $365 per ton last weak and $206 per ton last year. The trend is expected to hold as the world fears a net drop in output of 31 million tons (from 678 million tons in 2009-10 to 647 million tons in 2010-11) mainly due to Australian rains and Russian drought. This is 14 million tons short of 661 million tons world requirement estimated for next year.

Similarly, maize prices, which peaked at $287 per ton during June 2008, have passed $302 per ton. They were up from $288 per ton last weak and $167 per ton last year. Though the world maize production during the current year is expected to remain at 809 million tons – only four million tons short of last year’s production of 813 million tons – it falls some 31 million tons short of international requirement of 840 million tons. With wheat diverted to poultry feed to meet maize shortfall and also maize diversion to ethanol production, wheat prices are expected to remain high.

The total grain (wheat, rice, maize, soybean, barely) deficit during 2011 would be around 61 million tons – supply of 1,726 million tons against consumption of 1,787 million tons. This shortfall would naturally convert into higher prices and hit the world poor again.

For countries like Pakistan, it would be a mixed blessing: higher grain prices would pump additional money into rural areas but add to urban poverty and food insecurity. Even in rural areas, extra money would go only to those who have surplus production (read big farmers) but may not benefit subsistence farmers. It may be a bane for majority and boon for a microscopic minority – a huge addition to further social imbalance in a society that is already dangerously lopsided.

To make the matter worse, the World Bank is telling that the trend of high grain prices would continue till 2015. Can Pakistan, which has not been able to land back on its financial and social feet after few months prices peak in the mid-2008, absorb five years of continuous volatility? Most certainly not!

The cost of a few months grain prices peak was so horrendous that even thinking the same pressure for five-year should drive everyone nuts. Immediately after the price peak receded, Pakistan issued fresh poverty figures at the beginning of 2009. It conceded a phenomenal increase of 15 per cent in the poverty incidence – up from 23 per cent in 2008 to 38 per cent in the beginning of 2009. Most of the independent researchers, however, put them even higher by three to four per cent.

Now the same kind of pressure would be exerted on Pakistan for five years if the World Bank warning turns out to be true. If five months of pressure added 15 per cent to the poverty incidence, what would be the social cost of five years? Especially when the state is certainly poorer, both socially and financially, than it was in 2008-09. Currently, it neither has money to subsidise grain nor credible mechanism to take subsidies to the poor. It leaves the poor vulnerable to these fluctuations, and places the country on a social time bomb.

Pakistan is one of the most stressed society when it comes to food security. A recent report by a British company – Maplecroft, which provides risk intelligence service for businesses – ranked Pakistan 11th most food stressed country in the world. In an indexation of 148 states, only countries like Angola, Mozambique, Congo, Haiti and Burundi stood above Pakistan. Similarly, the Food and Agriculture Organisation (FAO), World Food Programme (WFP) and the World Bank, by and large, have reached the same conclusion in their reports.

Granted that poverty is not exclusively agricultural phenomena, other policies (monetary and fiscal) also play their role. But, agriculture plays an essential role in an agrarian society like Pakistan. It is especially true it comes to food security, which is essentially a supply side (an agricultural) issue.

Considering the FAO definition, “food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life;” one can conclude that agriculture plays the pivotal role in ensuring security, especially in free markets operating on demand-supply mechanism. Any shortage could lead to spiraling of price, taking them out of common man’s easy reach. It is directly linked to agriculture (food production, and ensuring availability of sufficient per capita food).

The developing international grain shorrtage and prices would be a critical test for policmakers. It is time to prepare for it. Fortunately, Pakistan has healthy stocks of wheat, which is a staple for the country. But reports about the next crop are not so good. If the prices keep spiraling, its stocks would not survive smuggling during the next year, leaving the state vulnerable for next four years. The state needs to plan accordingly.

Huge additional income for the big farmers, which this international trend promises, also strengthens the case for agriculture taxation to better equip the state for dealing with social crisis that the same trend would generate.

ASIAN GAIN MARKET'S CONCERNS OVER COSTLY FOOD PRICES

“There is stockpiling and hoarding going on from Bangladesh, right through Indonesia and the Philippines."

Asian buyers are snapping up more rice and cheap Australian wheat to boost food and feedstock security in the face of record high prices that policymakers fear could stoke popular discontent and damage their economies.

World Bank President Robert Zoellick said global food prices have reached “dangerous levels”, underlining the anxiety among governments keen to head off a repeat of the 2008 food crisis, which sparked riots in countries from Egypt to Haiti.

“There is stockpiling and hoarding going on from Bangladesh, right through Indonesia and the Philippines, as everyone is scared about food inflation,” said Sajjid Haider Pasha, director of Hong Kong-based grains trading and shipping agency Shunshing Group.

“But we are not sure for how long people can maintain such strong momentum on imports,” he said on the sidelines of the World Grains Trade Summit in Singapore on Wednesday.

Grains traders said the Philippines had secured one of its biggest soymeal import deals in years out of concern that grains prices – already their highest in more than two years – will keep rising.

Fear of wheat shortages in 2008 led to a scramble for supplies, leading to restrictions on rice exports by key suppliers and to a rally in the price of the Asian staple.

Many analysts play down the prospect of a repeat of the 2008 crisis, which also spurred high inflation and deep trade deficits as countries coped with rising import costs.

Still, world grain supplies have been tightening for months as droughts; floods and fast-growing demand have caused prices of wheat and corn to more than double from last summer’s lows.

Wheat, corn and soybean prices are at prices last seen in 2008, although below that year’s peaks. One key difference now is that rice is less than half of its 2008 peak.

Buyers are scouring the globe to tie-up food supplies for both population and livestock.

Bangladesh is paying up to import 200,000 tonnes of Thai parboiled rice in a government-to-government deal, sources said on Wednesday, part of a plan it announced last month to triple imports to boost stockpiles and supply security.

The price is $580 a tonne, over $50 a tonne more than it paid for parboiled rice from an Indian firm through a tender.

Bonanza for exporters

Australia provides a temporary solution for buyers looking to cap the cost of feeding livestock because floods have forced as much as half of its bumper wheat crop to be downgraded to animal feed.

One of those buyers could be Japan, which is considering plans to replace 1 million tonnes of its imports of corn this year with feed wheat and rice, Mitsutoshi Tada, chief grains trader for the National Federation of Agricultural Cooperative Associations in Japan, a leading importer, said on Wednesday.

Tada did not break down how much would be rice for human consumption and how much would be wheat feed for animals.

The Philippines has bought 200,000 tonnes of Australian feed wheat for shipment in April and June, traders at the Singapore summit said.

It also signed one of its largest soymeal import deals in years, buying 240,000 tonnes of the feed ingredient from South America last week for shipment between April and August, they said.

The world’s biggest wheat producer China has already bought up to 500,000 tonnes of Australia’s feed wheat, and may double that to a million tonnes this year, traders said this week.

A drought in China’s wheat-growing north has put the crop at risk, although the area under threat is shrinking following snow and efforts by farmers to improve irrigation.

China has wheat reserves to meet a year of consumption, but the drought has caught the attention of investors globally after the U.N. Food and Agriculture Organisation warned last week the drought was “potentially a serious problem.”

Australia is not the only country cashing in on abundance in a time of global shortage.

Pakistan last month resumed wheat exports for the first time in three years and has already sold 1 million tonnes to Bangladesh, Indonesia and Vietnam, traders said on Wednesday.

Action urged

The Group of 20 leading nations, whose finance leaders meet on Friday and Saturday in Paris, has promised to take action on rising food prices.

France – the revolving G20 president this year – is struggling to garner support for its plans for tough curbs on commodities speculation.

Indonesia said on Wednesday it would urge the G20 this weekend to put pressure on financial markets to clamp down on speculation on food prices.

Mills raise cane rates to ensure supplies

THE supply of sugarcane to mills in Khyber Pakhtunkhwa has picked up following fall in gur prices and improved rates being offered by sugar mills.

Gur prices plunged to Rs5,000-5,500 per 80 kg in local markets from Rs6,000-6,500 last month and Rs7,500-8,500 last October. This has prompted farmers to take their crop to millers who are offering better prices these days.

The price offered by mills is Rs338 per 50 kg of cane. But farmers Farmani Gul Khan argue that on the basis of recent gur prices this season, it should be around Rs450 for 50kg.

Since 2007, gur has been costlier than sugar.But it has lost its place of being the first priority of farmers in the province. For example with a crop of 300 maunds, a farmer will earn around Rs83,000 if he opts for gur, and over Rs100,000 if he takes it to mills, says mill owners.

Cane manager at the Premier sugar mills in Mardan Masood Khan says increase price offer has augmented supplies to the mills. “The cane supply situation improved in February and we are crushing around 3,000 tons of cane daily, approaching fast to our peak crushing of 4,000 tons achieved some years ago. We are running the mills non-stop. Gur is our main competitor. If its prices come down, farmers will come to us and vice versa. But for the moment, we are satisfied. Cane supply to mills in Dera Ismail Khan and Charsadda has also improved a lot,” he said.

Why do growers often prefer gur making? “The gur agents make advance agreements to farmers, and payments are made for standing crops. They provide seasonal/crop-based loans to growers which are used for buying inputs and meeting their domestic needs. How could farmers sell their cane crop to mills in this situation?” asks Jehangir Khan, a farmer.

“The millers, conversely, wait for farmers to bring their crop to the mills which they have already pledged to gur agents against return of advance payments or easy loans. Cane crop is also bought by cane-juice-sellers on advance payments. The millers should make agreements with cane farmers as is done in case of tobacco crop. They should purchase cane crop at fixed and better rates. Why can’t they make advance payments or provide loans to farmers like their competitors at the start of the season?” he asks.

Jehangir said farmers at present had to go to mills to get indents for their cane and suggested that it should be the other way round. “They need to reach farmers like their gur competitors. The millers in the past had opened local cane purchase/dumping centres. The farmers would bring their produce to these centres and the millers would pick it from there. This needs to be revived,” he suggests.

“Besides a fixed price for certain fixed sugar-content, farmers should get enhanced payment for produce with better sugar-content. This will be an incentive for them,” he maintains.

“In Punjab a large quantity of gur, named duplicate is being produced by mixing gur with glucose and other ingredients. It has not only a good look but also tastes better and is cheaper.

Around 100kg of duplicate is prepared in an hour. Farmers in Khyber Pakhtunkhwa are also planning to start producing this variety.

This means that more and more cane will be used for making gur in future. Millers will have to be more responsive and competitive to avoid this scenario,” Yousaf Shah, another farmer, adds.

“Farmers opt for gur making for two other reasons as well. One: they have to feed their livestock with cane-grass which necessitates intermittent cutting of crop as allowed by gur manufacturers and not simultaneous harvesting of the entire crop as needed by mills. Two: they use gur in their homes which they make even if they take bulk of their crop to mills. This can be avoided by providing fodder seeds and supplying farmers with sugar on deferred payment,” says Shah.

Khyber Pakhtunkhwa produces about 1.3 million tons of sugarcane. It can produce up to 0.1 million tons of sugar if cane supply to mills is improved.

But the problem is that the area under cane cannot be increased because of its competition with wheat or maize and water shortage. “Investment in research for high-yielding cane varieties and increasing per acre yield with better sugar content is the need of the hour. Millers should also help, ” Jehangir argues.

Farmland title records in a shambles

THE cumbersome procedure for farmers to get their land records authenticated has been a major hassle in their effort to procure bank loans. The situation has been worsened since the revenue records were burnt by angry protesters reacting to Benazir’s assassination in December 2007. The computerisation of revenue records is moving at a slow pace.

After the recent floods, farmers need funds badly to grow Kharif crops. Sindh growers complain that the province does not get its due share in agriculture loans

It has been over three years since the record is perhaps not reconstructed or properly preserved. Even the Sindh High Court, Hyderabad circuit bench, had expressed its ire over slackness being shown by concerned officials for preservation of revenue record. The court, through its May 28, 2009 order, had even restrained the revenue authorities from mutating the record.

Senior Member Board of Revenue(BoR) Ghulam Ali Shah Pasha had informed the bench that funds were the main hurdle in this regard and the court had passed another directive too. But since then no one has heard of any update although record’s computerisation is said to be progressing.

Until July last year, a blame game continued between finance and BoR authorities with Senior Member Revenue Ghulam Ali Shah Pasha accusing additional secretary finance Sindh of misleading the court by stating in a letter that ‘BoR is wrongfully using court orders to extract more government funds for an assignment which does not cost much.’

Abadgars need revenue record to prove ownership of their land on the basis of form-VII, receipts of Dhal (tax) and in case these documents are not available revenue officials have to make on the spot verifications which they normally avoid for lethargy. They have not conducted verification for all burnt records. Board of Revenue authorities have not done anything after Dec 27, 2007 mass scale arson incidents.

“The department perhaps is avoiding computerisation of revenue record because they have their own vested interests. Once the record is computerised chances of interpolation, forgery and duplication will be lessened”, said Syed Mehmood Nawaz Shah, general secretary Sindh Abadgar Board. He alleged that revenue officials demand money for issuing sales certificates to growers in any land transaction.

Software programmes are available and even government is working on satellite imageries in different departments particularly for development works. The same approach can be applied to preservation of revenue record once and for all. The records of around 518 Dehs fully and 344 Dehs partially were burnt in Sindh, according to Provincial Record Cell BoR in Sindh as a result of Dec 27, 2007 arson incidents. There are 5,947 Dehs in 122 talukas of Sindh.

SAB president Abdul Majeed Nizamani welcomes the proposed computerisation of revenue record but says it will take time. He states that process of verification and cross verification is a difficult process when growers need sales certificate for land.

Mehmood Shah says by now the BoR authorities should have completed reconstruction of record in the affected Dehs. According to him, revenue officials didn’t improve their working though three years have passed and when a grower can’t prove ownership of his land for one or the other reason how will he be able to seek loan for Kharif crops, he asks. He has learnt that so far records of only 60-70 Dehs has been prepared as revenue officials claim that khatedars are not cooperating with them when they visit the affected areas.

This indicates a serious problem. In absence of pass books, the growers are not expected to get loans this Kharif season. A group of growers, says Nadeem Shah from Thatta district, had approached revenue authorities last month and in December for seeking pass books. They were told that revenue officials would hold open katchery to verify their claims and the BoR would be informed about such claims.

Around 20-25 per cent of loan disbursement has been affected in Rabi season because of this issue. Growers are going to confront the same problem in the Kharif, he says. “Until floods, the growers didn’t seek loans as much, but floods have changed the situation altogether. If they didn’t get money for Kharif sowing it will be a major setback for them,” he says.

Rice cropping pattern for better returns

AS things stand today, rice, along with sugarcane, is becoming an increasingly ‘unaffordable crop’ because of growing water shortage. It is especially true for ‘coarse and other’ varieties of rice that now cover over 70 per cent of the sown area.

Currently, Pakistan is sowing three categories of rice: basmati, coarse and others – huge array of hybrids and some smuggled varieties of unknown origin. Of all these three categories, only super basmati can bring better price in international market and can, to some extent, justify consumption of huge water resources.

The other two categories have become a very costly drag on water resources. Both of them neither have substantial domestic market nor attractive prices in the world market.

The international price differential between them and basmati is around 300 per cent – $300 per ton for coarse crop against $1,200 per ton for super basmati. But the three categories take the same amount of water – around 3,000 litters per kilogramme – to mature.

Can Pakistan continue wasting its precious water resources to get dirt cheap price in the world market? Of course not! Water is emerging as the most crucial factor in agricultural settings. Almost all new technologies now revolve around water, not crop as traditional concept was. So, it may be time to shift its agricultural and cropping priorities to match its water realities.

Other countries have already started making such a shift. India has already legislated to shift its rice crop to the monsoon season instead of ground or canal water. In 2009, it promulgated “Sub-Soil Water Preservation Act” and restricted its farmers from planting nursery before May 10 and sowing before June 10 – thus reducing irrigational requirements of canal water and maximising use of monsoon rains.

In Pakistan, it is total reverse. Farmers here start planting nursery as soon as in April and sowing crop in May. Thus, by the time monsoon hits the country, the crop has already received three to four irrigations – all coming from canal water. That is exactly the point where Pakistan needs to make the shift. It must shift sowing deadline to later part of June or first week of July, and then ensure both deadlines.

India, experts say, is already reaping the benefit of the Act. During the last two years, sub-soil water level in the rice belt of Indian Punjab has increased by seven centimetres.

Pakistan needs to make the shift more urgently than India because huge water consumption of its rice crop are simply mind boggling. The country matures its rice crop with around 17 million acre feet (MAF) of water – more than three proposed Kalabagh Dams (5maf) and more than two Diamir-Bhasha dams (8maf), the biggest possible dam in the country. The cost of crop becomes even horrendous when taken in financial terms.

According to agricultural economists, one million acre feet (MAF) water, if used judicially, should benefit an economy by $2 billion annually. Thus, the rice crop, in its present settings, takes some $34 billion worth of water to mature and earns roughly $2 billion in foreign exchange. Does that make sense to anyone? Certainly not!

The latest export figure further exposes the folly the country is sticking to at a greater financial peril. According to them, it exported two million tons of rice during first seven months – up to January 31 – and earned $1.141 billion. During these months, basmati export went up by 17 per cent but earnings increased by only 12 per cent because of price factor. Even its premier variety is suffering from price decline. Why should it be sticking to those varieties that do not make economic sense at all?

It is not to suggest that Pakistan should abandon rice crop altogether, but to advocate re-positioning of the crop, especially of coarse and other varieties. These two categories consume around 12maf of water (read $20 billion) and earn a few hundred million dollars. It hardly makes sense especially when the world is shifting to niche markets, and adjusting domestic agriculture patterns accordingly. Why should Pakistan be an exception?

Water realities are changing fast. The country had the worst kinds of floods in July and August last year and is currently suffering 12 per cent shortages, barely six months after. The cropping pattern now needs to be shifted to suit water realities.

Rice, being a water guzzling crop, must be the prime candidate for realignment. Sugarcane can be the next. Rice crop, which is not a staple – its per capita consumption is only 15kg against 124kg of wheat – must quickly be repositioned.

By shifting the nursery planting and sowing dates, and then observing them strictly, Pakistan can get rid of many so-called hybrid varieties because they would not fit the timeframe. Interestingly, the current date of nursery sowing is May 10, but hardly anyone in the country observes it. It is especially true in potato growing areas.

Pakistan needs to take this deadline to the end of May and actual sowing towards the end of June so that it can save precious water resources and utilise them for other better priced crops.

Developing new cane varieties

CULTIVATION of early maturing varieties of sugarcane with better per acre yield is needed because of growing water shortage. Sindh, being at the tail end of Indus River system, is quite often hit by water shortages. This necessitates developing suitable cane varieties through intensive research.

Cane needs 67 inches of irrigation water till its harvest. The water that otherwise should have gone to irrigate wheat fields is diverted to preserve cane crop. Sugarcane`s average per acre yield is said to be around 500 maunds per acre while few progressive growers have obtained up to 800- 1100 maunds. Sugarcane is grown in September-October but harvesting is delayed to 16-17 months particularly due to the running price tussle between sugar mills and growers.

Growers feel that production of cotton is affected by sugarcane. Pakistan, area wise, ranks fourth among 105 sugarcane growing countries, 14th in production and 60th in yield. The per acre sugar recovery rate is unimpressive.

Cane is grown on 2.8-3 million acres in Pakistan, and covers five per cent of total cropped area. It consumes 10.5MAF out of the total available 103MAF water. In Sindh it is sown on 0.6 million acres.

Growers in Sindh agree that average yield of 800 maunds per acre is achievable. Instances are there where 900 to 1,100 maunds per acre were obtained in Sindh. Figures of Pakistan Sugar Mills Association (PSMA) show maximum sucrose recovery of 9.46 per cent against average recovery of 8.8 per cent during 1994-1995 to 2008-09.

Abdul Majeed Nizamani, President Sindh Abadgar Board, who has analysed sugarcane production and related issues closely, is of the opinion that intensive research is essential to improve per acre sugar recovery besides yield.

“We can get average per acre yield of 800 maunds instead of 500. With this yield per acre recovery of sugar will come to 3.12 tons, giving, average sugar recovery of 9.79 per cent. Sindh and Punjab have touched 9.56 per cent mark in 2008-09,” he adds. Under such situation, he says, per annum sugar production of six million tons – higher by 1.5 million tons against requirement of 4.5 million tons – can be achieved for export purposes. The increased per acre yield of cane will also cut the cost of its production.

The increase in per acre yield can help reduce the acreage currently under cane cultivation. The land under cane can be reduced to 1.9 million acres from the present 2.8-3 million acres and the surplus land can be utilised for cotton cultivation.

On the other hand, he says, water use will be minimized. Research on sugarcane can ensure that crop is grown in February which matures within nine to 10 months when crushing commences, he asserts.

The existing 84 sugar mills in the country have the capacity to produce eight million tons of sugar. More sugar mills are in the pipeline and one is being set-up in Matli, Badin district.

Continuous cultivation of sugarcane is harmful for land`s fertility and agriculturists contend that either pattern of crop cultivation should be changed or the land should be given rest for some time.

“I got 2,400 maunds per acre in 1988,” claims Haji Nadeem Shah, a progressive grower of Matiari. He laments that agriculture department has failed to provide technological know how to growers to enhance yield per acre.

Sindh Abadgar Board general secretary Mehmood Nawaz Shah says that mills do not apply core sampler to determine quantum of sucrose in sugarcane.

He concedes that variety of cane like Thatta-10 which gives more sucrose content must be promoted by millers and prices for fine quality cane should be more than the indicative price offered as incentive for growers.

Agriculture (research) department has introduced Q-88 variety last year which has a potential of 1500-1600 maunds of cane per acre. It is also working on tissue culture to ensure disease-free plant.

According to DG agriculture research Hidayatullah Chajro, reducing crop duration might affect recovery of sugar. “We are working on germ-plasm to reduce number of irrigation water supplies to cane crop so that water scarcity issue can be addressed,” he says. He points out that another variety `Chandka` is suitable for upper Sindh growers with a potential of 1,800 maunds per acre. He blames growers for not using proper inputs and management techniques.

But Mehmood Nawaz Shah strongly disputes DG`s statement. He describes it a hollow claim as generally growers are not aware of these varieties except for traditional 237, 234 and Thatta-10. “We are using our land resources simply.

What we can get out of two acres, we are using four acres for the purpose and it is incompetence of research wing that doesn`t come up with proper research. There should be more varieties with better sucrose content”, he says.

Cotton import versus onion export

INDIA which still refuses to honour its cotton export deals signed with Pakistani importers in the post-flood period has now given a new twist to the unpleasant episode. It has informed Pakistan that it is ready to lift the ban on cotton exports if the latter resumes its onion exports through rail and land routes.

According to a report in Indian daily The Hindu on January 10, the commerce ministry officials say that this bargain has been conveyed to Islamabad by their external affairs ministry. “The Indian side has conveyed to the Pakistani counterparts that it was ready to revisit the cotton export ban and ceiling issues, if the gesture is reciprocated by Pakistan through the removal of the ban on the movement of onion,” a senior official said. It is, to say the least, an outright unethical approach.
There is no denying that holding back the commodity, already purchased by the Pakistani importers only because the global prices have risen, is an utter violation of the Article XI of the GATT agreement which prohibits export bans that benefit domestic industries.
India has been the second largest exporter of cotton in the world. By imposing the ban, the Indian government has created turmoil and panic in the world market. If exporters failed to deliver on time, importers have a right under the law provided in Letter of Credit (LC) to go into arbitration and sue them in England. But majority of Pakistani importers avoid this way since that the process involves much waste of time. Some importers from Pakistan, China and the US have, however, gone for arbitration in their disputes with Indian exporters, he added.
On January 6, Pakistan banned onion exports to India by land which irked New Delhi for this pushed up onion prices in that country. “Now we are waiting for a positive response from the Pakistani side, and we could have a second look at the cotton export ceiling and ban to ease the situation there,” the Indian official said.
The flash floods in August and September submerged more than one million acres of fertile land. The areas in south Punjab and interior Sindh, which together produce the largest amount of cotton, were the most affected. Pakistan`s textile industry has been hit by the suspension of cotton sale of about one million bales by India. This cotton was urgently needed to meet export orders and also to tide over the shortage between November and January but India`s Textiles Commissioner suspended fresh registrations for exports. The cotton exports were banned by the textile ministry on April 19. But many contracts were signed by exporters prior to the ban, which came into effect in April. Many of these were of buyers from Pakistan and Bangladesh.
India opened registration for cotton exports of up to 2.5 million bales on December 31 last and plans to export 2.5 million bales by February 25. Of the 5.5 million bales being surplus, three million bales have already been exported.
According to APTMA officials, Indian traders have, for the fifth time in the current season, backed out of their export commitments to Pakistan and want fresh negotiation on prices. The export deals were signed in October but were cancelled five times because the prices in the international market registered a big rise each time. The Indians were unwilling to sell cotton on agreed prices to Pakistanis, although it was morally wrong.
During the last five months, Pakistan has placed orders for about one million bales at rates ranging from $0.71 per pound to $1.52, but Indians have so far delivered only 67,000 bales at rates between $1.45 per pound and $1.52 and at a time in December when the price in international markets was 20 cents lower than the agreed price. Despite all these hassles, Pakistani importers prefer to buy cotton from India because it takes only one day to reach Pakistan compared with 44 days in case of the US, Brazil or Argentina.
Meanwhile, the American Apparel & Footwear Association (AAFA) has appealed to the US secretaries of state, defence, agriculture, commerce and the US Trade Representative Ron Kirk to take immediate action to stop the government of India from continuing its export ban on cotton or from extending the ban to cotton yarn or other products using cotton.
Since April 2010, India`s ban on the export of cotton has inflated the price of cotton all around the world to its highest price in 150 years, says AAFA President and CEO Kevin M. Burke in his petition. In the last eight months alone, the price of cotton has more than doubled to around $1.40 per pound. This will very soon translate into higher clothing and footwear prices for hard working American families at a time when they can least afford it, he said.
He said that the skyrocketing price of cotton has also sent the domestic US apparel, footwear, and textile manufacturing industry that supplies to the US military into disarray. On their face, the Indian government`s actions are blatantly discriminatory and illegal. The US apparel industry, he argued, faces a Hobson`s choice of trying to absorb the rising costs, putting in peril the fragile economic recovery of the US apparel industry and the hundreds of thousands of the US workers they support, or to pass on those rising costs in the form of higher prices for the Americans
At the global level, cotton production estimates are 115.9 million bales for the year 2010-11 against 100.41 million bales last year. Main producer at the world level is China with production estimates at 32.5 million bales, followed by India 25.4 million bales, the US 18.7 million bales, while in the case of Pakistan, market estimation is 10 million bales instead of 11 million bales claimed by the ministry of food and agriculture.
Brazil is likely to produce 6.8 million bales, Uzbekistan 4.7 million bales, and other small countries would add about 17.7 million bales. The International Cotton Advisory Committee in August 2010 forecast about 114.4 million bales demand at global level for the current fiscal.