Bangladesh plans to buy 1.5m bales of fibre a year from neighbor
Dated- 13 Apr , 2012 - Bangladesh
Bangladesh seeks an agreement with India to import 1.5 million bales of cotton a year to ensure a smooth supply to spinners, a senior official of the commerce ministry said yesterday.
If India agrees, a cooperation agreement will be signed between the two governments, but the private sector, not the government, will import the cotton, said Bangladesh Tariff Commission (BTC) Chairman Mozibur Rahman.
Rahman joined a meeting at the commerce ministry with Commerce Secretary Ghulam Hussain.
Bangladesh launched intense talks with the Indian government to ensure cotton supply despite a ban on the exports of the fibre. The spinning sub-sector in Bangladesh is heavily dependent on Indian cotton.
The government will open talks with Indian Textile Minister Anand Sharma, who is scheduled to visit Bangladesh on May 5.
India, the second largest cotton producer, banned exports on March 5 to build stocks for its domestic market.
BTC will prepare a paper for talks urging India to either lift the ban or sign an agreement to allow 1.5 million bales (1 bale=170kg) of cotton a year.
“BTC has convened a meeting for April 16 to take opinions from different stakeholders on the issue of cotton imports from India,” Rahman said.
In a normal situation, cotton traders can import as much as they want, but when the ban is in force, they cannot import the item, the BTC chairman said.
In recent years, Bangladesh's dependence on Indian cotton marked a rise as spinners prefer the next-door neighbour to other countries, as it cuts lead-time and carrying costs significantly.
The consumption of raw cotton in Bangladesh was estimated at 3.5 million bales in 2011-12, down around 5.5 percent from 2010-11, due to a decline in imports and weaker demand from the spinners, the United States Department of Agriculture said in a report.
Cotton consumption in 2012-13 is forecasted to reach 3.6 million bales, according to the report.
India yesterday allowed the export of 1 million bales of cotton that was registered with the trade ministry before the ban on shipments and will revalidate another 900,000 bales by April 17, according to a Bloomberg report.
India barred all cotton exports on March 5 to secure domestic supplies after shipments surged before the ban to about 9.5 million bales, more than the 8.4 million bale surplus the government estimated.
If Bangladesh requires cotton this year, it has to buy from the 1.9 million bales to be allowed by Apr 17.
