Demand for Indian cotton from Pakistani traders

On one hand Indian exports jeopardize over China unwinding its inventory at the same time Pakistan brings smile on cotton farmers in Maharashtra, as they have started buying loads of cotton from them. In fact, not just Maharashtra, Pakistan is buying cotton from Gujarat and Andhra Pradesh as well.

Due to shortfall of cotton in Pakistan; they are buying it in huge quantities from India, particularly from states like Maharashtra. Also, Indian cotton is not only cheaper but of superior quality. Moreover sourcing the fibre from India reduces transportation costs.

Pakistani traders are paying cotton farmers almost Rs5,300-5,500 per quintal (100kg). The same amount was being sold in Indian markets at Rs4,300-4,500 per quintal.

Dhiren Seth, president of the Cotton Association of India, said that so far almost 5lakh bales (one bale is 175kg) of cotton has been exported to Pakistan. India is the world’s second largest cotton producer and exporter.

Normally China is the main buyer of cotton. But this year they have stopped importing cotton in large quantities due to their internal problems.
A trader said that the sudden rise in cotton rates is a windfall gain for Indian cotton farmers. Initially, they thought that the cotton rates would remain stagnant. But the rates surged once Pakistan started buying it in large numbers.

Another trader Chirag Patel said that some farmers are still holding back their stock because they are expecting a further surge in price.

Sanjay Patil, a cotton farmer from Jalgaon, told dna on Monday that this year the production of cotton is bountiful. Initially, cotton got sold at Rs4,000-4,200 per quintal. But, now they are looking for rise in price which is likely to go up to Rs5,500-6,000 per quintal. Farmer are wanting to sell at high price to get back the cost incurred by them during production. Expenses have gone up because of increasing costs of seeds and fertilisers. Also, cheap labour is no longer available; at times they have to pay extra money to get labourers. But they are happy because the rates have gone up slightly and all thanks to Pakistani traders.

According to Kumar Ketkar, SAFMA president and veteran journalist, besides cotton most Indian crops and computer books are exported to Pakistan. India should focus on strengthening its ties so that both countries can benefits in the long run. Free business ties are good for both countries rather than Sena activists saying India should snap all ties with the country.