Duty on Lint export by Indian : Textile sector to spend $800m on import.

KARACHI: The import of 200,000 cotton bales from India is in the doldrums as Indian government has imposed an export duty on the produce, importers said on Tuesday. “Besides the Indian lint prices witnessed an increase on higher demand as Rs 7,960 per 100 kilogramme”, a member Karachi Cotton Association, Shakeel Ahmad said.

He said Pakistan’s textile sector would have to bear a burden of around $800 million for import of cotton to fulfill its immediate requirements of the produce.

Ahmad said Pakistan produced around 12.69 million bales during outgoing crop season 2009-10, while the textile sector’s total need is 15 million cotton bales. He said, “Lint stocks in the country stands at around 125,000 bales while there is a wide gap of around 3 million cotton bales in the country against the requirements”.

Indian cotton prices increased around 27 percent and there is a possibility of cancellation of Pakistani orders on the basis of difference in import price”

“Indian traders are in habit to ask difference even on confirmed import orders and this happened twice when Pakistani importers faced their unlawful demand in past”, he added. Pakistan has so far imported around one million cotton bales from India at an average import price of Rs 5,8000 per 100 kilogrammes while remaining orders for almost 200,000 bales were in doldrums, Ahmad maintained. The clash of short-term negative supply fundamentals and the outlook for lower production and a sharp drop in stocks for the 2009-2010 outgoing season also give impetus to volatile cotton prices in the country.

The lint price will further rise in view of burgeoning prices of cotton in the international market and price brunt will be bore by the country’s textile sector, he said.

In international market, the lint price was 80-81 cents per pound on April 15, 2010 with an increase of 6 cents per pound.

He said lack of expertise in fighting cotton virus around 20 percent crop in Punjab and interior Sindh was affected during outgoing crop season. Other factors attributing behind lower production are less area under cultivation due to shift towards sunflower and sugarcane etc, severe weather conditions and crop diseases like Cotton Leaf Curl Virus (CLCV) and mealy bug. The spot rate of KCA also witnessed an all time high of Rs 6,100 per maund on April 20, 2010. The cotton sector faced worst institutional agriculture credit crunch due to non-professional approach of creditor agencies and planners in agriculture ministry, he added.

Source : Dailytimes.com