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Pakistan will have to import 4.5 billion bales of raw cotton soon through Karachi port

Pakistan will have to import 4.5 million bales (170kg each) to bridge the gap between the production and consumption of raw cotton and incur an expenditure of 1.58 billion US dollars during the current year. Cotton production in the country has come down by five million bales during the last two years according to Pakistan media reports

Pakistan was the third largest raw cotton exporter, but it has become a net importer during the last two years. Last year, Pakistan imported around 2.7m bales from India at a cost of800 million US dollars mostly using the Wagah land border route. The route gave tremendous freight advantage to textile mills mostly situated in the adjacent Punjab province.

About two months back, cotton prices in India were low owing to higher cotton production estimates but the prices have moved up substantially now, making the import of cotton from across the board costly according to Industry sources.

At the start of the cotton season in India in October, prices were as low as Rs 35,000 per candy (356kg). More recently, the prices soared to Rs 50,000 per candy due to the intervention of the Cotton Corporation of India (CCI).

Pakistanís Department of Plant Protection (DPP) restricted cotton imports from India when low prices prevailed there citing phytosanitary conditions. The DPP had restricted the import of cotton through Wagah border since the cotton arrive in open trucks which may expose them to pests and other diseases. Due to the pest problem cotton import to the country has to be routed through Karachi port but such imports through sea will enhance the cost for Pakistani textile mills situated in the interior Punjab province.

The textile industry in the country has demanded that the government remove 4 per cent import duty from raw cotton as 4.5m bales will be required to meet local demand. Prime Minister Nawaz Shairf had assured the textile industry that the duty on cotton imports were going to be lifted this year because farmers would already have sold a major portion of the local crop.

The current raw cotton stock in Pakistan is adequate to meet the requirements of textile mills for only two months and hence the urgency for imports.

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