India Finally Dashes Hopes For Cotton Import.

KARACHI: The textile sector of the country will bear an additional burden of more than $320 million on cotton import after Indian Ministry of Commerce refused to allow lint export Thursday.

The Indian government has finally decided not to allow cotton exports and in this regard has put the February 10 meeting on the issue in cold storage.

The Indian Ministry of Commerce, right from the start, has not been in the mood to lift ban on cotton export and has never given any specific date in this respect since October 1, 2010.

All Pakistan Textile Mills Association, Pakistan Yarn Merchants Association and Karachi Cotton Association termed this “an unjustified step towards international importers who will face losses of billions of dollars”.

The chance for import of more than 200,000 cotton bales from India has finally ended, as Indian government has decided not to allow exports on mandatory licenses.

Member Cotton Committee of Federation of Pakistan Chambers of Commerce and Industry Ghulam Rabbani said, “The price parity for the Pakistani importers to go for imports other than India will increase 15–20 percent shipment charges and late arrival of consignments”.

Rabbani said Pakistan’s textile sector would have to bear a burden of around $900 million after $320 million extra cost for import of cotton to fulfill its immediate requirements of the produce.

He Pakistan produced around 12.69 million bales during outgoing crop season 2009-10, while the textile sector’s overall need was around 15 million cotton bales.

He said Indian cotton production rose on ground of India’s planted area, which has seen approximately 8 percent to a record level as producers planted on more land, as a result of higher fiber prices.

The Indian exporters are in a habit of not to honour commitment of importers and they had already cancelled 550,000 bales export orders to Pakistani on the back of higher lint prices in international market.

He said cotton prices have shot up 15 percent in about a month in the country, propelled by Indian act of stopping export of the cotton to Pakistan and other countries”.

India, the world’s 2nd largest cotton exporter, after fulfilling local consumption, had to export 5.5 million bales in the marketing year starting Oct 1.

Cotton prices in India rose sharply as China imported large quantities form the world’s second largest producer to meet the growing demand for textiles.

The planted area has already crossed the 2009-10 level and was at 10.5 million hectares until September 2010, a government data showed.

Indian industry officials are looking for cotton production in 2010-11 to be 32.5 million bales of 170 kilograms each — up from 29.5 million bales this year.

“The Indian exporters have been deprived of the benefit of production rise which has created sheer disappointment among them”, Ramani, senior member of the South India Cotton Association, said

In international market the lint price is hovering around 87-42 cents per pound. The CCA has lowered its 10-11-crop estimate by 100,000 tonnes to 6.96 million, which would still be slightly higher than its 2009-10 estimate.

In international market, New York cotton March futures closed at 185 cents per pound and May Futures closed at 181 cents per pound. The Indian prices also shot up to Rs 11,100 per maund.

Source : dailytimes.com.pk