Spinners import cotton at value higher than export prices

14 Apr '10

2 min read

According to an official from Karachi Cotton Association, during July 2009 – March 2010, overseas sales of raw cotton increased by 1349 percent, mainly due to its fine quality.

“During the cotton crop period, which is from July – March, the country exported almost 899,290 bales of cotton to India, Bangladesh, Indonesia, Vietnam and Central Asia”, added, Director, Ghulam Rabbani, Karachi Cotton Association.

Continued Rabbani, “During the same period last fiscal year, around 62,030 cotton bales were exported, which indicates a sharp increase in exports of Pakistan's lint, due to greater demand across the globe.”

Explaining the scenario, Rabbani said that, Pakistani cotton was the cheapest in the world, especially in terms of the exchange rate of Rupee versus US Dollar, which appreciated about 35 percent in a single year, from Rs 60 to 84 versus one USD, and made Pakistani cotton's parity incredibly high.

This year, Pakistani cotton stood at US cents 70 per pound, while Indian and cotton from other countries was approximately higher by US cents 6 per pound, all the year through. Pakistan's lint fetched more than $1,595 per ton in the international market due to its fine quality, strength, uniformity, maturity and fineness.

“It was good for country's economy to generate good foreign exchange, but I disagree with the point of receiving dollars, as we exported good quality cotton at US Cent 70 per pound on an average basis and now, we are in queue to buy cotton from international markets and are paying almost US Cent 10-15 per pound higher than our export prices; to meet the demands of our spinning industry”, said Rabbani.

According to Rabbani, cotton will continue to play a key role in Pakistan's economy for the years to come.

Pakistan has the capacity to raise their cotton production to over 20 million bales. This will in turn raise their exports of cotton and other cotton-based products, which can fetch over $15 billion per year. The Federal Committee on Agriculture (FCA) has set a target of 13.6 million bales for Kharif 2010 and to meet this target, due discussions were held last week.

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