Traders buy Indian cotton on new rates

60,000 bales from fresh contracts arrive.


Reuters December 01, 2010

ISLAMABAD: Pakistani traders have inked fresh contracts on new rates to import cotton from India, after Indian exporters delivered little under previous deals on lower prices, industry officials said on Wednesday.

Textile firms in the world’s third-largest cotton consumer have banked on neighbouring India to meet demand after massive summer floods damage to the crop caused an estimated shortfall of about four million tons.

“Traders here have signed new contracts between $1.33 and $1.5 per pound and about 60,000 bales have already arrived,” Naseem Usman, chairman of the Cotton Brokers Forum, told Reuters. “Very little has come from the previous contracts signed earlier, after a slight upward adjustment between the parties.”

Traders had booked about one million bales in the August-September period for delivery from October to January from India, the world’s second largest producer, industry officials said. But traders said in October that the majority of Indian dealers told them they were unable to meet commitments as they had not been able to register for cotton exports in time.

Most dealers alleged Indian exporters used registration suspensions as an “excuse” to escape their contracts because of rising international cotton prices in recent months.

“We have received less than 10 per cent from nearly one million bales contracted from India earlier on lower prices,” Yasin Siddik, vice chairman of the All Pakistan Textile Mills Association (Aptma) said. “But new contracts are being signed with Indian dealers on new rates and that cotton is coming,” he added.

Published in The Express Tribune, December 2nd, 2010.

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