Pakistan will have to foot bill of $1.58bn for cotton imports

Pakistan, one of the largest raw cotton exporter to bridge the gap between the production and consumption of raw cotton will have to foot a bill of around $1.58 billion for the import of 4.5 million bales (170kg each) as cotton production is expected to be around 10.54m bales in 2016-17.

Pakistan has been an importer for the last two years. Last year, Pakistan imported around 2.7m bales from India at a cost of $800m. With cotton production clocking up at 15m bales in 2014-15 and 9.5m bales in 2015-16.

The country has also lost its fourth position in the world in terms of the production of raw cotton. There was a time when Pakistan was the largest exporter of cotton yarn globally, according to Asif Inam, chairman of the All Pakistan Textile Mills Association (Aptma) for the Sindh-Balochistan zone.

About two months back, cotton prices in India were low owing to higher cotton production estimates, But the prices have moved up substantially now, making the import of cotton from across the board costly, Mr Inam added.

At the start of the cotton season in India in October, prices were as low as Rs35,000 per candy (356kg). More recently, the prices soared to Rs50,000 per candy due to the intervention of the Cotton Corporation of India (CCI).

Mr Inam said that Pakistan’s Department of Plant Protection (DPP) restricted cotton imports from India when low prices prevailed there citing phytosanitary conditions. According to reports, the DPP has also restricted the import of cotton through the Wagha border because it is usually via open trucks, which may expose local cotton to pests and other diseases.

This means cotton imports can only be via sea. However, this will further enhance its cost for Punjab-based textile mills that are already complaining about high gas tariffs.

The APTMA official said that the government should remove 4 percent import duty from raw cotton as 4.5m bales will be required to meet local demand because current stocks in the country are insufficient.

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