Bangladesh expects India to lift cotton export ban soon


April 12–DHAKA (THE DAILY STAR/ANN) — Bangladesh expects India may lift a ban on cotton export soon as the neighbour’s textiles minister will visit Bangladesh early next month to discuss the issue, said a government official yesterday.

After the ban was imposed on March 5, Bangladesh launched negotiations with India and other cotton producing countries such as Uzbekistan to ensure a better supply as the country heavily depends on imports.

India, the second largest cotton producing country, slapped the ban mainly to build up its domestic stocks.

“Indian Textiles Minister Anand Sharma is coming to Bangladesh in the first week of the next month to discuss the cotton issue. I hope we can resolve the problem through discussion,” Commerce Secretary Ghulam Hussain said.

Hussian said his Indian counterpart will also accompany the minister during the visit.

The Bangladesh’s commerce secretary also went to India last month to discuss the issue as the local spinners are heavily dependent on Indian cotton.

Also, Bangladesh is trying to sign an agreement with the Uzbekistan government to ensure a smooth supply of cotton all the year round, Hussian said.

“However, the commerce ministry has convened an internal meeting at the ministry today (Thursday) to discuss the overall situation of stocks, supplies and imports,” he said.

In recent years, Bangladesh’s dependence on Indian cotton marked a rise as spinners prefer this country for its geographical proximity which cuts lead-time significantly.

Moreover, import of Indian cotton costs lesser freight charges with shorter lead-time due to the nearness of the country, compared to CIS (Commonwealth of Independent States) countries.

Under the present rules, spinners cannot buy cotton directly from the growers in the CIS countries. They buy the item from a third country or a third party, which raises the prices and lead-time.

According to commerce ministry statistics, Bangladesh imported 39,398,83 bales of cotton in a year from July, 2010 to June 2011.

Of the total amount, 41.82 percent was imported from India, 35.31 percent from Uzbekistan and other CIS countries, 7.68 percent from Africa (East and West), while 15.19 percent from other countries including the US, Australia, Pakistan and China, during the period, the data showed.

Another senior official of the commerce ministry said Indian cotton accounted for less than 20 percent even two years ago.

But, the volume is rising due to lesser freight charges and shorter lead-time, he said.

According to a report, consumption of raw cotton in Bangladesh was estimated at 3.5 million bales in 2011-12, down by around 5.5 percent from 2010-11, due to a decline in imports and a weaker demand from the spinners.

Cotton consumption in 2012-13 is forecast to reach 3.6 million bales, said the report from the United States Department of Agriculture.