20000125

All cotton banned

by India sold out

at higher rates

SHAHID IQBAL

KARACHI: The exporters have sold out at higher rates all cotton which was initially bound for India but was later refused by the importers, as India put ban on its import, exporters said.

Along with the rising trend in cotton exports and in prices all over the world, the banks in Pakistan have speeded up their credit lending to the textile sector which sharply raised lint prices by about Rs.300 per maund during the last one week, textile experts observed.

The scenario suddenly changed, just in a week, as the textile sector found money to buy cheap cotton.

"Banks had put restrictions on lending before December 31, 1999. This was the reason that despite the cheapest cotton being in the market, the spinners could not buy the required quantity of raw material," said a textile miller.

He said that the sector received a good amount of liquidity from the banks in the last two weeks and the demand shot up.

"We are expecting that most of our cotton will be lifted by the textile millers by the end of this month. We had stocks of over 1.2 million bales in the beginning of this month. If the current high rate of buying continues, we will be able to dispose of all the remaining unsold cotton," said a ginner.

He said that this might compensate the losses of ginners.

Exporters said that they had made contracts at 32-33 cents a pound with India, "but now we have sold it at 37-38 cents per pound."

Thus, those who hold 100 bales will get additional Rs.150,000 and those having 1000 bales will get Rs. 15,00,000 additional amount. Sindh cotton is available at Rs. 1300 to Rs.1400 per maund and Punjab cotton prices ranges up to Rs. 1700 per maund.

The exporters said that Indian importers had made contracts for about 250,000 bales but when the Indian government banned import of Pakistani cotton, "we sold the same to Indonesia, Thailand, Philippines and Bangladesh at higher rate."