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Good buying in tight cotton market

DR ZAFAR HASSAN

LAHORE: Good buying of cotton was reported on Tuesday when nearly 15,000 bales were transacted in a brisk turnover. Lint prices registered a rise between Rs 25 to Rs 50 per maund (37.32 kgs), while prices for seedcotton (kapas/phutti) recorded gains of Rs 25 per 40 kgs. Besides the ginners, some exporters were also selling in the domestic market following frustration of their contracts with the Indian importers after the Indian government move to ban Pakistan cotton last week on alleged viral or fungal infestation grounds. The secretary of the Karachi Cotton Association has debunked Indian claims and added that Pakistan cotton has been exported to various countries including India for the last 50 years after proper fumigation and no complaint of bacterial, viral and fungal disease has ever been received from any importing country of the world, including India.

The price idea of cotton from Mirpurkhas or Tando Adam in Sindh reportedly ranged from Rs 1,150 to Rs 1,200 per maund without the 15 percent sales tax, while the price idea for cotton from Nawabshah or Sarari is said to have ranged from Rs 1,250 to Rs 1,300 per maund; 500 bales each from Jam Sahib, Nawabshah and Sarari sold at Rs 1,300 per maund (37.32 kgs), 1,000 bales from Khanpur Mehar sold at Rs 1,500 per maund, 1,500 bales from Daharki in upper Sindh (K-68) sold at Rs 1,530 per maund, 800 from Mirpur Mathelo sold at Rs 1,550 per maund, while 1,000 bales from Mando Dero are said to have been sold at Rs 1,600 per maund (on two-month credit basis).

Without the 15 percent sales tax, 1,000 bales of cotton from Yazman Mandi in Punjab reportedly sold from Rs 1,475 to Rs 1,490 per maund (37.32 kgs), 1,500 bales from Bahawalpur sold from Rs 1,490 to Rs 1,500 per maund, 1,000 bales from Rajanpur sold at Rs 1,500 per maund, 3,000 bales from Rahimyar Khan and 3,500 bales from Sadiqabad sold from Rs 1,500 to Rs 1,525 per maund, while 1,500 bales from Khanpur sold at Rs 1,525 per maund. The tone of the market continued to remain tight in the evening.

The consequences of the Indian government step to ban cotton imports from Pakistan are still reverberating in Pakistan cotton circles, which are expressing indignation against this malicious move that is not rooted in any reality. Cotton traders in Karachi elaborated that even if there was any viral, fungal or bacterial problem with Pakistan cottons, they would be adequately removed through fumigation at the time of shipment and also at the destination. The Indian step has not only dislocated several of the shipper here, but also put them in a predicament due to the problems they could face with their banks, increasing storage costs, and also the high costs of reselling this cotton.

The Chairman of the Karachi Cotton Association (KCA), Maqbool Sadiq, stated that exporter members of his association have expressed great concern.

A meeting of the exporter members of the KCA noted with concern that through this measure. A serious situation has been created whereby international contracts have been frustrated, a move which is against the interest of free trade and also the sanctity of international contracts. Cotton exporters in Pakistan have been left in the lurch following the ill-advised step and creation of unfounded doubts about the standard quality of Pakistani cotton.

A former KCA chairman and a leading cotton shipper, Zahed Bashir, also stated that the Indian government move is a political ploy to harm the cotton exports from Pakistan. He added that Pakistan is a prominent player in the global cotton economy and the Indian move has simply been motivated to put a blot on the legitimate cotton shipments from Pakistan. Zahid Bashir also said that Indian cotton importers are asking for the return of their letters of credit. He further added that after the issuance of phytosanitary certificates against the shipments from Pakistan, all fears regarding any type of pestilence should have been allayed.