Microeconomics

M. Ammar Siddique

Presentation By

Our Commodity

Cotton..

Cotton, belonging to a family that includes

hibiscus and okra, produces a natural vegetable fiber used in the manufacture of cloth. Cotton produces a sweet nectar that attracts a variety of destructive insect pests, including the boll weevil, bollworm, armyworm, and the red spider. In addition to insect pests, there is also a very destructive fungus, called the wilt, that attacks the root system of the cotton plant.

Intoduction..

It is almost impossible to determine the original

habitats of the various species of cotton. Scientists have determined fiber and boll fragments from the Tehuacán Valley of Mexico to be about 7000 years old. The plant has certainly been grown and used in India for at least 5000 years and probably for much longer. Cotton was used also by the ancient Chinese, Egyptians, and North and South Americans. It was one of the earliest crops grown by European settlers, having been planted at the Jamestown colony in 1607.

History..

Cotton in Pakistan

Pakistan is the most important area for the production of cotton

According to the estimate, Sindh produce 15% of the Pakistan's cotton and Punjab is richer as 85% of the cotton is produced in Punjab

The agriculture sector in the country registered 1.2 percent growth

during the financial year 2010-11 as against the growth target of 3.8 percent and previous year’s performance of 0.6 percent. According to the Economic Survey 2010-11 launched here Thursday agri-sector has lost significant growth momentum as its growth slowed down to 2.7 percent in the decade of 2000s as against 4.4 percent in 1990s and 5.4 percent in the 1980s. Major crops remained the victim of natural calamities during the last few years and three out of last four years witnessed negative growth in the major crop sector.

The unprecedented floods in July 2010 destroyed two major crops including rice and cotton. As reported by SUPARCO an area of 2.364 million hectares under Kharif Crops 2010 was damaged. Major crops accounting for 31.1 per cent of agriculture value added, registered a negative growth of 4.0 per cent for second year in a row mainly because of decrease in production of rice and cotton 99.9 and 11.3 percent respectively.

Economic survey 2010-2011

Minor crops accounting for 10.9 percent of overall agriculture value addition grew by 4.8 percent as against the negative growth of last two years.The livestock sector recorded growth of 3.7 percent as against 4.3 percent growth of last year. Fishery sector grew by 1.9 percent as against last year’s growth of 1.4 percent.Forestry has experienced negative growth of 0.4 percent as against last year’s positive growth of 2.2 percent.

Cotton Production

Stats and graph of last ten years..

A declining trend of cotton's share in textiles fibers

since the 1970s compare to the chemical textiles (branched off oil) was stated- in 1960 the part of cotton was of 68.3% against 21,8% for chemical textiles and at the opposite the percentages were respectively of 39,7% and 57,7% in 2002. Cotton remains nevertheless by far the most important natural fiber of the 20th century (see "uses"). In a development context, cotton is crucially important for income and employment provided in its production and processing

An overview..

Cotton production in world

cotton  being  a  non‐food  cash  crop  contributes  significantly 

in  foreign  exchange  earning.  Cotton accounts for 8.6 percent of the value added in agriculture

 and about 1.8 percent to GDP.  The crop was sown  on  the  area  of  3106  thousand  hectares, 

10.1  percent  more  than  last  year  (2820  thousand hectares).  The production is estimated at 12.7 million bales for 2009‐

10, higher by 7.4 percent over the last year’s production of 11.8 million bales. However, the cotton production was 5.0  percent  less than the target of 13.36 million bales mainly due to the shortage of irrigation water, high temperatures in the month  of  August  resulting  in  excessive  fruit  shedding,  flare  up  of  sucking  pest  complexes  and wide spread of Cotton Leaf Curl Virus (CLCV).

Cotton in Pakistan

QUALITIES OF COTTON IN PAKISTAN

1) Sindh Provinces:-

Sirmast Qalindri k-68/69 Desi qualities

2)Punjab Province:-

Delta Pine M.S.39*40 – B -57

149.F Ac – 134 Nayab 86 M.H.H.93 desi qualities Nayab 78 Bt- cotton

Last 10 years production in Pakistan

Area, production and yield of cotton

Market Conditoin

Pakistan are forecast to produce 27.0 million bales and 10.3 million bales in 2011/12, up 10 percent and 17 percent, respectively, from the preceding year. Harvested area in Pakistan is forecast to increase 8 percent and 14 percent in 2011/12, to 12.0 million hectares and 3.3 million hectares, from a year earlier.

Major cotton importers

Price Determination

The price of Wheat is determined by Government of Pakistan i.e.

Agriculture Minister Forces in market

KCA official prices for cotton in Pakistan

Contribution to

Sales tax

The imposition of 17 percent sales tax on agricultural inputs will add to the troubles of the government as the overall contribution of agriculture sector in GDP growth may decline by 2-3 percent.

According to agricultural experts the tax would affect the overall agricultural productivity of Pakistan. The 17 percent sales tax on agricultural inputs including fertiliser, pesticides, tractors and other inputs would cost the poor growers heavily, analysts maintain.

the contribution of the agriculture sector to GDP growth is 24 percent that may decline to 19-20 percent after this tax is imposed”. Mughal said that with this additional burden of Rs 70-80 billion on the agriculture sector, the total number of people living below the poverty line would increase from 80 million to 110 million.

Conclusion

The cotton plant has great economic importance because

cotton fiber is obtained from its fruits.

Additionally than cotton fiber for textiles, other commercial products are also obtained from the cotton plant: such as raw materials for soap manufacturing, cellulose that is used in some cosmetics and in paper making, cooking oil, and animal feedstock, among others.

Even in international bank notes cotton has a prime importance, the Euro currency bill paper is completely made from cotton. Also the dollar bill, in it's more modern versions is also manufactured with this fiber

Importance

Refrences

Pcga.orgUcat.comFiber2fashion.comFbr.comFinance.gov.pkE-to-china.comAgricorner.com