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Indian cotton exporters in a dilemma
Jan '08
Experts believe that Indian lint exporters may fail to fulfill their commitments of supplying cotton bales to Pakistan. This is essentially because higher freight rates, increasing domestic demand in India and heavy exports to China are inhibiting the supply of cotton.

Pakistan is already short of cotton this year and to add to the grave situation, India has promised to cater 3.7 million bales to China. Besides, India is itself facing a deficit of 5 million bales of cotton and the domestic demand is also on the rise forcing exporters to stall any further supplies.

Industry sources confirm that so far, Pakistan has received only 800,000 bales from India in contrast to the 2.6 million bales promised earlier.

However, Indian exporters are not to be blamed entirely. Freight charges have increased tremendously in the past one year. A container accomodating 130 cotton bales costs US $1,700 instead of the $750 charged earlier.

A similar rise in prices can be seen with seed cotton which costs Rs3,300 per maund instead of the previous Rs2,000 per maund.

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