After Pakistan placed huge import orders, the Indian exporters have raised prices of raw cotton by 2-4 cent per pound (around Rs 150-200 per maund) to 64 cent per pound. Importers told Business Recorder on Wednesday that Indian raw cotton demand is on the rise in Pakistan and in other regional countries including China and Bangladesh owing to its better quality.
The reason for its increasing import is a shortfall faced by these countries. Pakistan is facing a shortfall of around 2.5-3 million bales during the current season, whereas country''s cotton production is expected 12.5 million bales against the local demand of 15.o-15.5 million bales during the current fiscal year.
Keeping in view the expected shortfall and for procurement of better cotton, millers are placing huge orders for import of raw cotton from different countries mainly from India. "We have placed around 0.8 million cotton bales import orders during the last four months from October 2006 to January 2007 to the Indian exporters, of which 0.3 million have reached Pakistan during the same period," importers said.
Taking advantage of a huge demand from Pakistani miller and importers, the Indian exporters have raised its price including all quality of raw cotton ie J-34, Shankar-6 and MU-5 by 2-4 cent per pound, they added. They said that after the recent upsurge, price of J-34 cotton has reached 54-55 cent per pound as compared to 51-52 cent per pound. Price of Shankar-6 has been increased by 4 cent per pound to 58-59 cent per pound. Previously it was 54-55 cent per pound.
The MU-5 cotton price has gone up by 3 cent per pound, previously it was being sold at 60-61 cent per pound to have reached 63-64 per cent pound. Importers said that Indian raw cotton prices were already higher than Pakistani cotton by Rs 150-200 per maund. Earlier, it was being imported at an average rate of 52-61 cent-per pound, while after the current upsurge Indian cotton is now Rs 350-400 per maund higher than Pakistan, adding that its imports are made at 55-64 cent per pound.
A leading cotton trader Naseem Usman said that "although imported cotton is costlier than domestic cotton but due to its better quality, millers prefer the imported cotton and placing huge orders for Indian cotton".
He said that India''s current season cotton production is around 27 million bales against the consumption of 23.5 million bales, with a surplus of 3.5 million bales, however export of 4.5 million bales has create some shortage.
Indian exporters are raising the prices due to shortage and huge export orders. They want to take advantage of the rising demand of Indian cotton by the Pakistani millers, he added. "We are importing raw cotton mainly from USA, Brazil, central Asian and other countries, where the cotton prices are unchanged," he said.