MUMBAI(Commoditiescontrol): The strict compliance placed by National Plant Protection Organisation of Pakistan and shortage in premium variety cotton post Pink Boll Worm(PBW) incidence could drop exports to Pakistan in 2017/18.
The government of Pakistan has abolished import ban on raw cotton from India however slapped the industry with tough set of regulations.
Pakistan, which is the world’s fourth largest cotton producing country, falls short of around 4 million bales(170 kg) a year to meet the local demand of nearly 16 million bales. Officials said a permit from the Department of Plant Protection of Pakistan’s(DPPP) food ministry is mandatory, under the new phytosanitary conditions, for import of unprocessed cotton, including raw or seed cotton, cotton lint, linters, cotton waste and cotton stuffing from India.
The National Plant Protection Organisation would inspect and test the consignments according to appropriate procedures and to ensure the goods are free from biosecurity pests. “The goods must be clean and free of contaminant seed, soil and plant debris and other bio-security risk material prior to arrival in Pakistan,” the department said in a letter. (Full Report)
“Indian raw cotton usually contains some amount of cotton seed and nearly 3-3.5 percent of trash which does not meet the conditions specified by DPPP. Further, they demand that Indian cotton should be bio-security free sanctioned from the Directorate of Plant Protection, Quarantine and Storage. However, these strict conditions would be difficult to be agreed upon”, said Sandeep Jain, Partner, DP Cotton.
Pakistan has already consigned around 2 million bales(155 kg each) of cotton from West Africa, US, Brazil, etc with the major chunk of imports likely from US. From the total commitments, 0.3 million bales have been committed from India for delivery in January, as per Mr Naseem Usman, chairman of Karachi Cotton Brokers Association(KCA).
These Indian consignments were agreed prior to the release of the rules placed by the NPPO of Pakistan. However, Indian merchants were concerned over the tough rules placed by NPPO and were having second thoughts on the shipments of the agreed consignment.
Indian merchants were in a dilemma amid strict conditions placed by Pakistan and were not keen to export cotton to Pakistan unless there was some sort of relief over these conditions, added Sandeep Jain.
Pakistan usually imports around 1 to 1.1 million bales of raw cotton from India since it was cheaper and faster way to source cotton to meet industry demand.
In the past, Indian cotton used to satisfy the requirements of good quality cotton(Staple length: 29-30mm, MIC: 3.3-3.2) however, the recent pink bollworm attack on Maharashtra has raised uncertainty whether merchants would be able to source good quality cotton this season. MNCs, who deal in exports were sourcing average quality cotton with huge variation in parameters in the price range of Rs 33,000-36,000/candy, mainly exported to Bangladesh.
India will surely face shortage of premium variety cotton this season however the extend of shortage is yet to be determined amid production estimates of India ranging between 36-37 million bales(170kg each) from the earlier 38-40 million bales.
The uncertainty over Maharashtra crop will vanish after December 25, when 70 percent crop would be harvested from the field and experts would survey the crop to analyze the damage on quality of the crop. (Full Report)
Further, with premium varieties available amongst the major export competitors namely, US, Australia, West Africa and Brazil; India is likely to face tough competition in order to export to Pakistan.
Two factors, strict compliance of phytosanitary conditions and shortage of premium variety cotton, is likely to bring difficulties for Indian export volume to Pakistan to reach 8 lakh bales this season amid tough export competitors in the industry.
(By Commoditiescontrol Bureau; +91-22-40015534)
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