KARACHI (January 25 2004): India has put ban on export of raw cotton to Pakistan as it is itself facing shortage, said importers here.

Pakistan's importers said they had already booked 300,000 bales from India and were willing to import more as the country is facing huge shortage this year.

However, no more cotton would be available from India as it fears shortage of production by 1.5 million bales.

Pakistan may have to import two million bales this year because of short cotton production and increase in consumption.

For the last couple of months Pakistan's traders have been approaching India mostly for imports.

They have already signed agreement for import of tea.

"The 300,000 bales import means a business of about Rs 3 billion which is a substantial amount for trading with India," said a cotton importer.

So far, no Indian trader has signed any big deal for import from Pakistan. Both India and Pakistan are competitors in the export markets of textile products and both have almost the same markets like European Union and United States.

However, India has an edge over Pakistan in the Russian and east European markets.

India is also willing to sell textile machinery to Pakistan but Pakistan textile mills owners said that Indians want to replace their old textile machinery.

However, Pakistan has equipped itself with the latest textile machinery during last four years and spent more than one billion dollars for the upgrading.

The importers said Pakistan might make up its cotton requirement from USA despite very high prices.

The American cotton is available at about 80 cents per pound, which is more than double compared to previous year's prices.

Courtesy Business Recorder