KARACHI: India is likely to cancel Pakistani cotton import orders after the commodityΆs price surged significantly from the rate at which the two countries have agreed upon, a broker said on Wednesday.

“India would back out from its commitment of delivering fine quality cotton to Pakistan,” Shakeel Ahmed Khilji, a broker at the Karachi Cotton Exchange (KCE), said.

This will not be for the first time that India would cancel the deal. It has done so several times in the previous years by creating non-tariff barriers.

Pakistan has recently placed an order to buy 65,000 bales from India at a price ranging from 70 cents per pound to 76 cents but the commodity price has once touched 85 cents per pound at New York cotton market in recent days.

“The significant difference between the price at which Pakistan has given orders and the price prevailing at New York cotton market can be a cause of the likely cancellation of the deal,” he said.

India has delivered some quantity of the ordered cotton to Pakistan but has stopped delivering the remaining quantity to get the benefit of global price hike, he said.

Taqi Abbas, another broker at the KCE, also said doubted that India will fulfill its commitment to deliver import order to Pakistan. “India is not delivering cotton to Pakistani buyers since it has developed tension on the borders with Pakistan.

Gohar Ejaz, a former chairman of the All Pakistan Textile Mills Association, however, denied the issues with Indian exporters. “There were some border tension some time back but not everything is fine.”

Pakistan has so far imported around one million bales from India during the ongoing fiscal year, he said, adding that imports were necessary to overcome the deficit of two million bales in demand in Pakistan during the year.

“The country needs around 15 million bales (155 kilograms each) against an estimated production of 13 million bales this year.”

In total, Pakistan has imported around two million bales of cotton in the ongoing fiscal year (July 2012 to June 2013) to meet the growing demand of quality cotton yarn, especially from China, he said.

Besides India, Pakistan has also imported cotton from the United States, Brazil and West Africa.

“Pakistan imported the commodity at a landed price, ranging from 80 cents per pound to 86 cents this year. This is equivalent to Rs7,000 per maund (37.324 kilograms).”