Dhaka to Seek Separate Quota for Indian Cotton.

Bangladesh will demand a separate quota for raw cotton from India to ensure the item's adequate supply for the readymade garment sector, the prime foreign exchange earner.

The cotton price has reached its all-time high of $1.19 a pound on the international market this month, which troubles Bangladesh and China -- the two countries that depend on cotton imports for their textile industries.

Industry insiders pointed out that crop damage by floods in Pakistan, the world's fourth largest cotton producing country, and a ban India has imposed on cotton exports have led to the price spiral.

"We'll demand a separate quota for raw cotton during the bilateral trade talks with India," said Commerce Minister Faruk Khan yesterday, before leaving for New Delhi to lead a 23-member business delegation.

Khan said Bangladesh wants to settle the cotton supply problem with India so that the country remains immune to any Indian ban on the item's export.

Delhi enforced the ban in April in an effort to ensure supply to its own textile mills. Apparel makers of the neighbouring country also opposed the export of 5.5 million bales of raw cotton pointing to a possible deficit.

Ashish Bagrodia, chairman of North Indian Textile Mills Association, has been quoted by Indian newspapers as saying: "Cotton exports beyond 5.5 million bales should not be allowed at any cost, since domestic industry consumption as per projections by the Cotton Advisory Board is going to be more than 26.6 million bales."

Bangladesh is expected to sign four memoranda of understanding on border haats and standard operating procedures of trucks with India.

Primarily, two border haats -- one at Kurigram and the other at Sunamganj -- will be operational as soon as possible, Faruk Khan said.

Easing business terms for bilateral trade expansion, zero-tariff for 61 Bangladesh products, removing non-tariff barriers to jute export and duty-free export of RMG products to India will be high on agenda.

India has pruned its list of products that cannot be exported to India from 700 to 480. However, Bangladeshi traders have been complaining that the cuts did not help much as garments and footwear, where Bangladesh could easily gain a market in India, were still on the banned list.

In 2008, India had allowed import of eight million pieces of Bangladeshi garments but Dhaka points out that Bangladeshi has already exported 70 percent of its allowed quota in five months of this calendar year and the quota needs to be expanded besides withdrawing duty on 61 product lines.

Source : thedailystar.net