KARACHI: Several Indian exporters of raw cotton have withheld export orders of 0.5 million bales of cotton, placed by Pakistani textile manufacturers, sources informed Pakistan Today on Wednesday.
As the price of raw cotton in India has ramped up by about 30 percent, Indian exporters were reluctant to meet orders, many of which were arranged before global cotton prices swelled, given by Pakistani textile manufactures and importers, said sources.
Under international commercial regulations, it is mandatory for the Indians to fulfill their commitments undertaken in binding contracts. APTMA recently held an important meeting in Lahore in which the issues of delivery, or lack thereof, took precedent.
Two months ago the prices of Indian raw cotton (candy) stood around 75 cents per pound. At that time Pakistani textile manufacturers and importers placed orders to import one million bales of cotton.
Indian exporters have supplied half a million bales of cotton to Pakistanis, but the remainder has been withheld. Local textile manufacturers are facing a massive shortage of raw material. It should be noted that Pakistan is facing a shortfall of about three million bales of raw cotton.
Currently, the price of raw cotton in India has escalated to the point where it now stands at 1.05 dollars per pound, compared to price two months ago of around 75 cents. Indians are not willing to supply further cotton to Pakistanis at prices agreed on placement of contracts, a source in the All Pakistan Textile Mills Association (APTMA) emphasised.
The association has discreetly contacted the Ministries of Textile and Foreign Affairs to use apply direct pressure on Indian exporters to supply the cotton to Pakistani importers.
A few months ago the Indian government first imposed a ban on the export of cotton which it later rescinded. Using a different tack, the Indian government has started the process of registration of cotton export orders; another tactic to delay exports of the commodity to Pakistan.
Every Indian exporter must be registered and all cotton exports confirmed with the concerned authorities. Apparently, India wants free trade with Pakistan, but practically the Indian government continues to stymie and undermine trade with their its neighbour.
The industry has placed orders to import cotton from India, the United States, Egypt and the Central Asian States to meet the shortfall, but at a high premium.
