KARACHI: With a sudden surge in import of cotton during the last two months, Pakistan is expected to import a total of 2.5 million bales during the ongoing fiscal 2013-14, traders said on Monday.
Pakistan has imported approximately 1.7 million bales so far during this fiscal year, Naseem Usman, a cotton-trader, said.Traders are importing cotton at a landed cost of 81 cents per pound to 88 cents per pound during the current season, he said.
Usman said traders continue to make significant import of cotton from India, as import from the neighboring country saves a lot of freight cost and transportation time.So far, Pakistan has imported approximately 1.2 million bales from India out of total cotton imports, he said.
In the beginning of the year, imports were slow because of the two reasons. Firstly, spinning mill-owners were waiting for arrival of local cotton into the markets. Secondly, the import cost was higher because of the continuous appreciation in dollar value against rupee at that time.
Now, the situation has changed. Rupee considerably recovered its value against the dollar during December and January. Secondly, ginners in Pakistan have a small quantity of high quality cotton in stock. “The low availability of high quality cotton always forces traders into increasing imports, as imports are made in search of quality,” he said.
Pakistan imports high quality cotton from India, US, Argentine and Central Asia every year to produce export quality cotton-yarn, while some of the traders also import cotton from Brazil, Africa and Greece.
Taqi Abbas, another cotton-trader, said that import from India might slow down in the near future after India raised price of its commodity higher than other exporting countries. “India has increased rate of cotton up to 90 cents per pound after New York cotton market (a benchmark market for cotton traders across the world) strengthened last week,” he said.
Abbas said Pakistan has imported cotton from India at the landed cost of Rs7,200 to Rs7,300 per maund (37.324 kilogram) in the recent past. The rate surged to Rs7,500 to Rs7,600 per maund since India raised the rate to approximately 90 cents in dollar term.
He said that India, however, was not a reliable country for the import of the commodity, as it usually cancels import orders from Pakistan whenever the price of the commodity goes up at the New York cotton market.
According to the Pakistan Bureau of Statistics (PBS), Pakistan imported 138,956 tons of cotton in the first seven months (July to January) of the ongoing fiscal year, which is 34 percent lower than 209,419 tons cotton imported in the same period last year.
In rupee term, the imports fell approximately by 25 percent to Rs31.36 billion this year from Rs41.91 billion last year, while in dollar term, it plunged by about 32 percent to $298.18 million from $435.60 million last year, stated the PBS data.