Uzbekistan has offered Pakistan's textile manufacturers 2.5 million surplus cotton bales at 20 percent subsidised rates over Liverpool cotton rates, sources told Business Recorder here on Monday. They said that a delegation of industrialists would leave for Uzbekistan shortly to negotiate the offer, eliminating some intricacies.
"We may face hurdles in opening LCs," said a leading industrialist, and added that "there is no direct link between banks of the two countries".
He said that the Uzbek government has asked for 15 percent down payment, and this issue would also come under discussion in the meeting.
He said that an official of Uzbek textile ministry had recently approached some leading textile exporters here to get Uzbek cotton at subsidised rates.
"We will offload our stocks at Bandar Abbas (Iran) and are considering to acquire a warehouse at Export Processing Zone (EPZ) in Karachi, where we will bring the commodity from Bandar Abbas," the Uzbek official told industrialists during a meeting recently.
However, the industrialists who are interested to avail this opportunity would suggest to the Uzbek officials to bring this commodity directly to Multan or any other warehouse near Lahore, since there is no duty on importing cotton.
"Some 300 units are situated in Punjab against 80 in Sindh. So, the industrialists are trying to get the Uzbek cotton to Punjab directly," sources said.
"If the Uzbek cotton is brought to EPZ warehouse, then the transportation cost from Karachi to Punjab would cost Rs 50 per maund," sources said, adding that if the consignments reached Pakistan through Bandar Abbas, then the estimated time of arrival could be two months.
"Therefore, we would suggest to them to acquire a warehouse in the Punjab region and would offer them our support to resolve this issue in the forthcoming meeting," industry sources said.
Leading exporters are of the view that locally produced cotton contains moisture rate of around 9 percent to 12 percent, while the Uzbek cotton has the moisture rate of 5 percent, maximum.
"Due to less moisture rate and modern ginning process, their (Uzbek) crop size and quality is of world class and contains very little trash, as compared to our country's crop," an exporter commented.
Since cotton arrivals for the current season could be delayed due to inadequate water supply, some industrialists are considering Uzbekistan's offer seriously.