KARACHI: Around 95 percent of the cotton import contracts of Pakistani traders with Indian counterparts are in jeopardy, resulting in losses worth billion of dollars.
“A quantity restriction on cotton export by the Indian government has inflicted more than $8 billion losses upon Pakistan’s imports from other countries, Pakistan Yarn Merchants Association (PYMA) member Khalid Rafi said.
He said Indian refusal of cotton and putting limits on yarn exports has cost billions of dollars loss to the textile sectors of Pakistan, Bangladesh and Vietnam.
Rafi said the export restriction limit of 5.5 million bales would leave Pakistani importers with empty hands and it was an attempt by the Indian yarn exporters to capture Pakistan’s export share of yarn to China, Vietnam, Thailand and Bangladesh markets.
“The Indian limits on yarn export to 720 million kilogrammes besides refusal to fulfil cotton exports to these countries has hurt the textile and yarn sectors of these countries, he remarked.
Pakistan’s yarn sector is already facing hardship in the form of higher regulatory duties and export limits, as its export has come down to around 55 percent, cotton analyst Shakeel Ahmad said. He said due to cancellation of more than 2.5 million bales cotton by Indian traders, Pakistan yarn and textile sectors would lose around 35 percent of its exports to the tune of Rs 35 billion. Ahmad said, “There are around 415 spinning units in the country out of which about 180 have suspended their manufacturing activities because of non-availability of cotton on cheaper rates.
He blamed Indian Commerce Ministry for violating World Trade Organisation rules as in open market economy, there should not be any ban on export or import but India does not bother.
Total requirement of spinning industry is about 15.5 million bales (170kg) per annum whereas average production of cotton in the country is hovering around 12 to 12.6 million bales.
The spinning industry is competing in the export market even though about 25 percent of the shortage of raw cotton is met through import.
Bangladesh’s Wal-Mart chief Khalid Hasan said, “Due to Indian limits on yarn and cotton exports, Bangladesh textile and spinning sectors would suffer billons of dollars loss on account of exports as well as would face closure of textile and garment units in the country.”
Bangladesh’s exports of textile products stand at 80 percent of the total country’s exports and under this situation the country will face a great setback besides nearing financial default.
Knit Asia, Bangladesh Chief Ziaul Islam Chaudhry said Europe would suffer around 40 percent imports from Bangladesh due to paucity of textile and clothing raw material.
