Indian ban on cotton export

KARACHI: The local lint prices will likely increase by 20 percent from the current price level of Rs 5,300 per maund to Rs 6,360 per maund due to the ban imposed by the Indian government on cotton export, fibre experts said on Monday.

Pakistan exported around 250,000 bales of cotton to India during January-February 2012 due to the lowest domestic prices and better export parity price, fibre analyst Shakeel Ahmad said. The export to India was made around 88-96 cents per pound and today the local price per maund in the country stands at Rs 5,300 per maund. The timely ban by the Indian Directorate General of Foreign Trade (DGFT) on lint export, when the New York Futures market has also become volatile and touched 96 cents per pound mark, Indian lint importers got benefit of almost 8-10 cents per pound price on their imports ranging from 88-96 cents per pound. India had already exported 8.5 million bales, higher than the government’s estimates made in January of 8.4 million bales of 170 kilogrammes each for the year on strong demand from China. India had signed contracts for nearly 10 million bales in total for export at 101-103 cents per pound, including those already shipped. Indian textile sector showed its concern on such large quantities of exports that cut the availability of lint in the domestic market. He said due to growing demand for fine grade lint in the local market, the prices would increase besides ban on Indian export would also cast some affect on country’s lint prices. Pakistan till March 1, 2012 produced around 14.37 million bales during the outgoing crop season, while the textile sector’s total need is around 15.2 million cotton bales. He said, “Cotton prices will shoot up by 15-20 percent in the country due to Indian ban besides New York Futures increase.” Ahmad said Pakistan textile and ginning sector need import of fine grades for blending purposes and after ban on Indian export the prices of country’s fine grade would likely increase by Rs 1,200 per maund in coming days.

India is the world’s second largest producer of cotton and most of its shipments go to China, the world’s largest user of fibre.