India urged to honour cotton deals

Post Source: Dawn Business Page

By Parvaiz Ishfaq Rana

KARACHI: Spinners on Tuesday urged the government to take up the issue of cotton with the Indian government and at the diplomatic level so that cotton deals contracted by Indian exporters are honoured. The spinning industry would run short of cotton within next three to four months if Indian exporters did not fulfill contracts signed with Pakistani importers. This was stated by All-Pakistan Textile Mills Association (Sindh-Balochistan Zone) chairman Yasin Siddiq at a news briefing here on Tuesday. There would be a gap of around three months before the arrival of next crop in July during which mills would either have to close down or look for alternative sources of raw material.

Assisted by Shahid Tata and Asif Enam, the Aptma leaders suggested that Prime Minister Yousuf Raza Gilani should take up the matter and also direct Foreign Minister Shah Mahmood Qureshi to involve Pakistani embassy in New Delhi to sort out the problem.He said that early in the season when cotton prices in the world market hovered around 80 to 90 cents per lb, many Pakistani spinners after estimating damages to cotton crop by floods entered into import contracts with Indian exporters.

The Indian government initially set export target for cotton at 5.5 million bales and the Pakistani spinners placed orders with Indian exporters for import of around one million bales, he added.

But suddenly the Indian government imposed restriction by putting condition for registration on cotton exports.

As a result many Indian exporters backed out from their deals because prices of raw cotton in the world market simultaneously moved higher to set a new record.

According to revised estimates, India will now have even more exportable cotton at 10 million bales, Yasin Siddiq said.

The Aptma chief further said that recently the Indian government once again opened up registration of cotton for exports of around 1.9 million bales and received export contracts for a huge quantity of around 24 million bales.

The Indian government did not ask for security deposit and only required the deals to be made on simple piece of paper, he maintained. At the time of opening of new registration for cotton exports, he said, the world cotton prices were hovering around $1.35 to $1.45 per lb against 80 to 90 cents per lb in October last year when Pakistani spinners placed their orders. Responding to a question, he said that from the previous contracts the Pakistani importers received only 250,000 bales and from the new registration around 150,000 bales would arrive.

In all, not more than 400,000 cotton bales are expected to come from India, which has a huge exportable surplus of around 10 million bales.

Due to geographic proximity, he said Pakistani spinners had been importing cotton from India for the last so many years but this season the sudden change in the world cotton prices prompted the Indian exporters to back out of their commitments.

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