Pakistan could turn to India for sugar, cotton.

Mumbai: India is set to produce a bumper crop of sugar and cotton in 2010-11 and part of the surplus is likely to be absorbed by Pakistan, where floods have ravaged crops in the main growing areas, industry officials said.

Pakistan's Punjab and Sindh provinces, the country's leading producers of both commodities, have been hit by the worst floods in decades, which may force it to increase imports, especially from neighbouring India due to freight cost advantages.

“There will be spurt in exports from India in the short-term to Pakistan, said the director of a leading Indian cotton export firm. After proper assessment of the damage we can put a figure on an additional requirement,” he added.

The flood has affected every province of Pakistan, with 1.4 million acres of crops being hit in Punjab alone.

“Record prices and a good monsoon prompted Indian farmers to expand acreage under both crops and supplies from the new plantation will begin from October. Cotton output in India will be more than last year's 29.5 million bales,” textile commissioner AB Joshi said last month.

India is likely to gain in a shortage scenario. Geographical proximity is another advantage. Pakistan will seek most of cotton imports from us, said a senior official with Sekhsaria & Co, a Mumbai-based exporter. During bad crop years, Pakistan usually increases cotton imports from India, the leading source in South Asia.

India, which was a net importer of sugar in 2009-10, will have supplies of 31.4 million tonne in the next sugar year beginning October, compared to domestic demand of 23 million tonne. Pakistan is most likely to buy from us. We have surplus. For Indian millers it is an opportunity to reduce inventory, Ashok Jain, president, Bombay Sugar Merchants Association said.

Source : financialexpress.com