LOC strife freezes India-Pak trade

YarnsandFibers News Bureau 2016-11-28 18:00:00 – Islamabad

Cotton importers and customs clearing agents claim a huge trade halt between India and Pakistan. The Department of Plant Protection (DPP) has stopped the import of agriculture commodities from India without a warning or written order because of increase in tensions across the LoC.

Officials of the department confirm the same. According to them, import of agri items from India through the Wagah border crossing and Karachi port and issuing permits for future imports has been halted.

Imran Shami, chief of DPP which is a subordinate department of the national food security and research ministry, however reasons the halt is a move to protect their farmers’ interests. He said that they have stopped import of tomatoes and other fresh vegetables in order to protect their farmers. According to him, they have enough tomato and other vegetables stocks, which they import from India only in case of shortages in the domestic market.

He denies Pakistan having stopped cotton imports from India. The halt is a consequence of the reports that the Indian exporters are not meeting our bio-security conditions. The reports are being looked into and restriction will be lifted on cotton imports if their apprehensions are proved wrong.

He said only those cotton consignments would be allowed to enter Pakistan through surface or sea routes where importers had already secured permits from his department and carried phyto-sanitary certificates.

A textile factory owner added that their cotton consignments are not being allowed to enter Pakistan through Wagah and Karachi for reasons known to the ministry but cheaper, subsidised Indian yarn is being brought in without any let or hindrance. At least 11 trucks of Indian yarn entered Pakistan on the same day the department stopped cotton consignments from coming to this side of the border.

He said the suspension of cotton import from India would create a huge problem for the textile exporters as the truncated domestic crop target of 11.25 million bales for this year appeared difficult if not impossible to meet.

The industry requires 14 million bales. They will still be short by three million bales of cotton even if the crop target is achieved. Cotton shortages after the ban on Indian imports would also make domestic prices shoot up at the expense of exports.

Alongwith cotton,the ameliorating tensions within both the nations has also affected trade of other agricultural commodities, including vegetables.

Pakistan had imported 2.7 million bales of cotton (1 bale is 170 kgs) - about 40 per cent of India's total cotton exports in 2015-16 - due to crop failure that wiped off 0.5 per cent of GDP growth. The industry is expecting to import 2 million bales this year.

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