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Indian cotton importers start L/Cs withdrawal

KARACHI: The Indian cotton importers have started withdrawal of letter of credits (L/Cs) drawn in favour of their Pakistani counterparts, a leading cotton exporter confirmed here on Monday.

"The Indian dealers approached us on Monday and intimated that they were withdrawing their L/Cs opened for import of cotton from Pakistan," said Karachi Cotton Association (KCA) former chairman Zahid Bashir.

The Indian Ministry of Agriculture had last week imposed a ban on import of raw cotton from Pakistan with allegations that it contains virus.

The Pakistani authorities affiliated with cotton trade have termed the Indian fears as baseless and politically motivated.

Talking to APP, Zahid Bashir said that the L/Cs were worth millions of rupees.

Pakistan cotton traders said the Indian cotton dealers are apparently being forced to withdraw L/Cs opened in favour of Pakistani traders.

"Indian cotton dealers are under obligation of Indian Ministry of Agriculture to withdraw the L/Cs," he said.

He was, however, optimistic that the Pakistani cotton will shortly find its market in other parts of the world.

India had been the single major buyer of Pakistani cotton for the current season as Indian traders made contracts for about 0.26 million bales of cotton so far. Cotton exporters said that 50,000 bales of cotton have already been shipped.

The Pakistani cotton is cheaper by Rs 300 to Rs 400 per maund as compared with Indian cotton. The Pakistani cotton is available at Rs 1,100 and Rs 1,300 per maund as compared to Indian cotton ranged at Rs 1600 and Rs 1700 per maund. APP