An opportunity to capitalize surplus cotton through WTO
By Imran Khan
Feb 07 - 13, 2000
India never acknowledges Pakistan's existence and adopted every course
of action to damage Pakistan, whether it was the act of closure of water courses in 1947
or the recent act of their own staged drama of hijacking of Indian airliner. A couple of
days ago Indian government has banned import of raw cotton from Pakistan on the grounds
that it contains exotic strains of destructive bacterial, viral and fungal disease which
are virulent under Indian climatic conditions.
The decision of Indian government to ban import of raw cotton from
Pakistan is another step towards maligning Pakistan. The B.J.P led government is trying to
give their people through this act that their main stand against Pakistan is still intact.
This message is directed towards the Hindu extremists people in order to regain their lost
popularity and credibility after the "hi-joking" drama of Indian airliner. This
may be a ploy to affect exports of cotton and cotton related products from Pakistan. Every
one knows that Pakistan's exports consists of mainly cotton related products which is
around 66 percent of our total export earnings. Once cotton crop is good in our country,
every one is hopeful of better economic performance.
This year cotton crop in Pakistan is expected to be around 10 million
mark. As of fortnight 31-12-1999, ginneries have received 8.2 million bales of cotton and
it is hoped that at the current level of arrival it will be around 10 million mark by the
end of the current cotton season. After taken care of higher consumption related to
opening up closed textile units and higher percentage of capacity utilization in the
existing units which is said to be around 9 million, it is said that we have at least 1.00
million bales available for exports.
Early this season, local prices of lint crashed due to higher arrivals
into the ginneries, coupled with falling international prices of lint which was quoted
around 44-45 cents per lbs, at the lower side as compared to 57-58 cents per lbs in
August. However due to lower production in China and India and other technical reasons
cotton prices in international markets has started picking up and is being quoted around
54 cents per lbs. for March delivery. It is hoped that these prices will continue going up
in the coming months as well.
There may some people who may be worried about their fate but the
silver lining in banning import of raw cotton by Indian authorities is that Pakistan can
gain more by selling this left over cotton to other countries like Indonesia. Sri Lanka,
Bangladesh etc., as well as another opportunity start capitalizing on it through W.T.O.
etc. Here is the break-up of total additional foreign exchange which can be earned after
this decision by the Indians.
Indian importers US $: 0.32/lbs. US $: 43.776 m
Current prices US $: 0.38/lbs. US $: 51.984 m
Additional foreign exchange to be earned US $: 08.208 m
After considering all these factors, we should say thank you to the
Indian government because out of total 0.409 million bales of 480 lbs, our private sector
exporters have contracted 3325,000 bales to India at an average price of US $ 0.32/lbs.
Out of this 325,000 bales only 40,000 bales have actually been shipped to India and the
remaining 285,000 bales can now be sold elsewhere at US $ 0.38/lbs. which will bring at
least US$ 08.208 million additional foreign exchange to out country. This will also give
another chance of local spinners to lift quality lint at reasonable prices. Another factor
which will help our spinners to compete with Indian spinners that they have closed one
source of quality lint. So "Thank you B.J.P and thank you very much India.