ISLAMABAD: An Indian ban on cotton exports has forced Pakistani buyers to look for alternative supplies, traders said on Thursday.
This has also caused the prices to soar and endanger the prospects of the country’s key textile industry, they added. Pakistani importers have booked orders for 300,000 bales (1 bale equals to 170 kilograms) in recent days, after India stopped registering new contracts for exports from April 19, to control soaring prices, said Naseem Usman, Chairman of the Karachi Cotton Brokers Forum. Cotton spot rates ex-Karachi were quoted at Rs6,800 ($80.95) per maund (37.32 kg) on Wednesday, a rise of Rs1,200 over the past month or so, according to cotton officials.
“The Indian decision has created a crisis especially for those who delayed the decision to import and now find themselves in trouble,” Usman said. “There is sort of a panic. We need to import at least 1.5 million bales to cover needs for May, June and July,” he added. Millers with no cover for the next two to three months are now buying from other sources such as West Africa, Central Asia and the United States, dealers said. Most supplies would likely come from West Africa, which is still attractive in terms of prices, another trader Ayub Usman, said from Faisalabad.
“There is certainly a paniclike situation as the local stock of about 100,000 bales will only last for a few days and my estimate is that some 25 to 30 mills will have to shut down until the start of supplies from the new crop,” he said. “World supplies have become very tight as sellers know Pakistan is in a difficult position and will be willing to pay whatever rates they demand,” he added. With an estimated 12.70 million bales from the 2009/10 crop, Pakistan faces a shortfall of about three million bales, and was relying heavily on neighbouring India to meet much of its needs until late- July, when the new crop will start arriving.
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