INDIA: Indian textile mills importing raw cotton from Pakistan

Indian textile mills have started importing raw cotton from Pakistan and are also scouting for other avenues of purchases as domestic prices have risen following a sharp hike in minimum support prices.

"Yes, millers are importing from Pakistan. Some may even purchase from the US. The domestic prices are so high due to the significant increase in MSP that millers are being forced to buy from other countries," Confederation of Indian Textile Industry Secretary-General D K Nair told PTI.

Corroborating Nair's statement, a leading cotton broker from Gujarat, Neerav Dalal, said: "About 1.5 lakh bales (One bale is equal to 170 kg) of raw cotton from Pakistan were imported through us recently for cotton textile mills. Part of the consignment is for a leading textile mill here."

Dalal, however, declined to name the mill.

While declining to either confirm or deny cotton imports from Pakistan, a senior Arvind Mills executive said, "We keep importing cotton from various countries to meet requirements. And as a business policy, the name of the country cannot be disclosed."

The government has sharply increased the minimum support prices of standard cotton (long staple) to Rs 3,000 per quintal for 2008-09 from Rs 2,030 in the previous year. The MSP of medium staple cotton has been raised to Rs 2,500 from Rs 1,800 per quintal.

The rise in MSP is seen as a pro-farmer policy by the government in the run-up to the general elections next year.

"The cotton prices in the open market are still ranging between Rs 22,600 and Rs 23,500 per candy, while that in Pakistan rules at Rs 19,000-19,600," Dalal said.

Though millers may have to settle for a bit inferior quality of cotton, it is still a viable commercial option for them, Nair reasoned.

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