A-Index 74.15 Cent/Pound

Iran Cotton Union Report to  68^th plenary meeting of ICAC Cape Town , South Africa , 7- 11 September , 2009

IRAN COTTON UNION

1- Geographical information:

Iran with an area of 1’648’195 square kilometers is the 16^th largest country in the world. The land is situated in the eastern part of the northern hemisphere between

44^o 14’ – 63^o 20’ latitude and 25^o 30’ – 39^o 47’ longitude and in south east of Asia and considered as one of the Middle East countries.

Neighboring countries on the north are: Azerbaijan, Armenia and Turkmenistan. On the east are: Afghanistan and Pakistan. On the west are: Turkey and Iraq. Persian golf and sea of Oman are located in south and connect the country to oceans. Caspian Sea where is biggest lake of the world, is also located on the north and make possible connection of Iran to CIS countries and some other countries. Because of diversity in agro climatic conditions, various horticultural products and field crops can be produced successfully in the country. 

2- Cotton in Iran:

Cotton has been cultivating in the country about 85 years ago. In Iran, out of the total 30 provinces, cotton is grown in 17 provinces. Cotton areas are shown in following map.

About 80% of total land under cotton cultivation is situated in five provinces including North Khorasan, Razavi Khorasan, South Khorasan, Golestan and Fars. The rest of the land allocated for cotton lies mostly in Mazandaran, Ardebil, Tehran, Isfahan, Ghom, Semnan, Markazi, Kerman, Kermanshah, East Azerbaijan, Ghazvin and Yazd provinces.

3- Area and production:

Based on latest report, issued by Jihad-e-Agriculture ministry, cotton area was 130000 hectares with a production of 85000 tones during 2008/09 season. With compare to season 2007/08 these show an increase of 7.7% for area and no change for production.

It seems that cotton area is facing 20% decrease during current season (2009/10). Despite existence problems, cotton cooperatives which have been established 6 years ago are still active and reached the number of 30 in country. The areas, productions and average yields for last ten years are presented in table 1. 

Table 1. Area and production of cotton in Iran.

4- Cotton Consumption:

Iran’s textile industry is cotton oriented and average domestic cotton consumption is about 130000 up to 140000 tones / season. Therefore domestic production can't cover textile industry consumption and about 65000 tones import has been done.

5- Varieties:

All the current grown varieties in Iran have been developed by the cotton research institute. During last three years a few number of newly imported varieties were examined for different areas to find out suitable substitutions especially for northern areas of the country. This year two new varieties named "Sepid" and "Khordad" released which are specified by shorter life period.

Until 1998 all the seed supplied to the farmers was fuzzy but according to Jihad-e-Agriculture ministry policies 15.5% of seed distributed was delinted and 84.5% was fussy (Area cultivated by any variety is shown in table 2).

Table 2. Cotton Varieties Grown in Iran

6- Insect control:

Insects are not a serious problem in Iran. In current season no critical insect damages have been reported and the farms were under control. The main important insects in Iran are: Boll worm (Heliothis armigera), Whitefly (Bemisia tabaci), Aphids (Aphis gossyppii), Bugs (Creontiades pallidus) and Spider mites (Tetranychus spp.). Consequently the use of effective pest controls is of utmost importance for the protection of cotton crop. Development of IPM is one of important programs to control insects and diseases in cotton farms. Unfavorable climatic condition, including continued rainfall in spring and cloudy condition in summer may decrease the yield in some areas.

Table 3. Insecticide Spraying in Iran

7- Disease control:

Verticillum (wilt) and Rhizoctonia solani (damping off) affect cotton production in Iran. Verticillium wilt is severe in Fars and north provinces (Golestan, Mazandaran and Ardebil) and no variety can be successfully grown on a commercial scale. Sahel and Bakhtegan varieties have a fair degree of tolerance to the disease.

In recent years GOCOS and cotton research institute have cooperated to examine many IPM methods to control verticillum and damping off successfully in farmer’s lands.

8- Biologic and Microelements programs:

in order to increase fertilizers efficiencies existed in soil to reduce chemical fertilizers consumption at cotton farms, Iran Cotton Union has been running extension programs to implements materials such as Bio phosphates, Biofert, unigol and other microelements and organic fertilizers amongst cotton farmer members since 4 years ago and aims to develop it each year.

9- Crop purchase:

Iran Cotton Union to support cotton farmers at the time of harvest and low prices has executed a new program in 2 important cotton provinces for the second year. According to this plan, cotton farmers sell their cotton to IR.C.U and are being paid cash the governmental guaranteed price. Then after ginning and selling the products, 90% of total profit will be paid back to cotton farmers through cotton cooperatives. This program has been praised by many farmers and IR.C.U hopes to develop it in cotton areas to cooperate farmers in business profits and as a result sustainable cotton production. Through this program almost 785 tones of seed cotton was purchased in five vast cotton areas last year. It is estimated that near 3000 tones seed cotton will be purchased in different cotton area production this year. The plan is to purchase one third of whole cotton by this program in next three years.

10- Irrigation Water:

Most cotton in Iran is grown on irrigated land and estimating that about 5% of cotton area is rain fed every year where is located on some part of north provinces (Gorgan and Mazandaran).  The non-irrigated area does not require irrigation due to relatively enough rains received during the cotton season. On the average for the irrigated lands, cotton is irrigated 4-5 times in some part of Gorgan and 10-12 times in dry zones. The number of irrigations greatly varies among provinces mainly due to amount of rains received in the area. Cotton is mainly irrigated using furrow and flood methods.

Table 4. Allocation of different irrigation methods in cotton areas.

Irrigation Method                                 Cotton Area (%)

Flood                                                            39

 Furrow                                                           60

                                    Drip                                                               1

______________________________________________

Low water use efficiency of close to 30%, high evaporation losses due to high temperature and the high cost of well water maintenance are of high concern to cotton growers.

11- Gin Factories:

About 81 years ago gin factories has established in Iran and the number of gins were increased over the years. The primitive and sophisticated types of processing units of ginning are available in the country. During last 30 years, no extra ginning factories are established in country and 20% of those are not operating due to insufficient seed cotton. Promoting the ginning processing units up to universal standard levels is a need for country but it depends on cotton area development.

12- Fiber Quality:

Iranian cotton is considered as one of the highly desirable cottons. In every cotton gin factory, there is an especial room for cotton classification where experts can control quality and grade bales right after baling. A certificate is then issued showing grade, staple length, variety and date of ginning. The cotton standards of Iran are close to universal standards. Fiber properties of different varieties of Iran are presented in tables 5.

Table 5. Cotton fiber quality properties of different varieties of Iran.

Iran cotton Union:

Iran cotton union established 7 years ago and 30 cotton cooperatives in different areas took the membership voluntarily.

Main objectives of Iran cotton union are: cultivation services to the farmer members, ease the affairs of production and improving farmers' income.

In order to fulfill those objectives Iran cotton union is following and attempting to take action in various fields:

1-Contracting and producing of certified cotton seed at the farm of suitable members.

2- Distributing of cotton seed among farmers thorough cotton cooperatives.

3- Providing and distributing of pesticides (government monopoly is being canceled gradually).

4- Attempt to reduce of pesticide consumption, replacing with biological fertilizers and development of IPM.

5- Distributing of fertilizers according to quota specified by the government (government is paying subsidies on fertilizers and kept it under its monopoly).

6- Attempt to improve the efficiency of chemical fertilizers and replacing by biological fertilizers such as azotobacter (nitrogen) and biological phosphate.

7- Contracting cotton insurance with cotton farmers as representative of "Agricultural insurance fund product" (governmental) in an attempt to insure all cotton area in Iran.

8- Providing and implementing educational programs at different fields of cotton production for cooperatives staff, cotton farmers and their children by studying in special courses and receiving cotton diploma.

9- Attempt to develop mechanization by providing and presentation of cotton mechanization plan to the government.

10- Implementing of cotton research plots at members farm in order to make them applicable.

11- Providing preliminary to implement social insurance of villagers through cotton cooperatives.

12- Providing preliminary to establish a fund to help cotton producers in aiming for development and improvement of cotton quantity and quality.

13- Support cooperatives by development of their activities and services to cotton farmers.

Iran cotton union after taking responsibility of producing and distributing cotton seed started some movements in order to improve the cotton seed qualities which are listed below:

1- Purchasing a gin factory in Kashmar (Khorasan province) where is the main center of cotton seed production (Varamin cultivar), and about 60% of total consuming cotton seed production in Iran.

2- Buying seed cotton of farmers to avoid mixing with other seed cotton and producing pure cotton seed.

3- Paying reward to those contractors (cotton farmers) who pick up dry and clean seed cotton to produce best possible cotton seed.

4- Financial aid to cotton seed contractors in order to pull off miscellaneous cultivars.

5- Presenting any kind of necessary technical support to contractors in order to best land preparation and farm management.

At present most of cotton farmers are member of cooperatives. The next program aims to membership all cotton farmers to enjoy cooperatives services.

New programs

1-Developing use of Micro elements at cotton fields to increase the yield and improve the quality.

2- Purchasing seed cotton from members to stop farmers selling their crop at the beginning of the season by low prices.

3- Introducing cooperatives to receive low profit loans to make warehouse.

Planning semi mechanized cotton picking machine:

In Iran according to mostly small land holding plus lack of workers at the time of harvest, hand picked cotton is one of the main elements of high cost and therefore low interest in cotton farmers to grow cotton. It is not also possible to use huge cotton picking machines in such small farms.

Iran Cotton Union at time of establishment started to find a solution to this problem and subsequently cotton area increase.

Hence, a survey took place three years ago to contract agricultural machineries experts to produce the first model of a semi mechanized cotton picker machine.

This cotton picker operates on the basis of vacuum with efficiency equal to 5 cotton picker workers.

The sample machine was tested in 2007 and after revising malfunctions tested again in 2008.

At the moment we are receiving the certificate of test center of agricultural machineries (Jihad-e-Agriculture Ministry) and we hope to produce it in mass after its operation confirmed by the center and take it to cotton farms.          

Rafiq chaudhry letter to Ir.C.u managing director

Dear Bahram:

You know that I am not a expert in the area of price forecasting. So,  

whatever I am saying here is my personal and NOT the ICAC view on  

prices.

Let me begin with the ICAC forecast first. ICAC has been forecasting  

the season average for 2008/09 at 82 cents for some time but current  

forecast is 79 cents. This is based on the ICAC statistical model  

which is comparatively young, two years old. The actual Cotlook A  

Index price for today is 63 cents.

The international economic crisis have taken a heavy toll on cotton  

prices. Commodities prices went down in the world but cotton started  

declining earlier than others and probably will be among the last  

ones to pick up. I believe that the international economic crisis  

will not be resolved in the next 2-3 months, the situation may start  

to improve but recovery will take time and so will cotton prices. If  

we look at cotton supply and demand situation in the world, season  

average should give significant increases in prices over 2007/08. Why  

it is not going to happen is that the uncertain situation in the  

international trade is keeping the prices low. Mills are not sure  

what is going to happen to consumer demand, how they are going to  

runs their financing, etc., is all adding to the hard task of  

forecasting for the current season. Forecasting for 2009/10 is  

unusually difficult at this stage.

Cutlook A Index has increased since last Friday but it may not be  

realistic to expect significant increases until February/March.  

Current time is the time when most cotton is harvested in the world.  

Prices will go up higher after the harvesting season in the northern  

hemisphere is over. My personal opinion is that end of the season may  

be around the 2007/08 season average which is 73-74 cents. You cannot  

quote it as an ICAC estimate. Pl. also do not forget that I am not  

and economist either.

Good luck, I hope it will be of some help. See you in Burkina Faso in  

November.

Regards,

Rafiq

ICAC