Cotton import from India
Devastating floods in Pakistan may have destroyed up to one fifth cotton crop, will give the opportunity to exporters of India who are eyeing the shortfall. Indian exporters to take advantage of a government decision to lift a ban on exports to help meet demand from Pakistan's textile industry. The restriction was imposed in April to keep domestic prices down. Armed with a bumper crop after a good monsoon, Indian groups are expected to begin exporting to Pakistan from October. President of the Cotton Association of India said that We aret ready to meet Pakistan's appetite, whose members include more than 400 leading cotton growers, ginners and exporters. Pakistan's textile sector, which accounts for 60 per cent of the country's exports, is likely to be hit due to damage to the cotton crop, which could be 20 per cent below usual, according to analysts. "Large fields of cotton have been washed away by the floods. Pakistan will be short of about three million bales, which will burden our already fragile economy by at least $1 billion. The flooding in Pakistan may result in agricultural losses of nearly $3 billion with the main farming region of Punjab. Pakistan has been importing cotton from India for the past few years now and should do the same now when it face a huge crisis. It is pertinent to note that Pakistan is one of the main importers of cotton from India, which is the second largest producer of the crop worldwide after China. Some millers are fearing a spurt in demand from Pakistan could pushed up prices. India will produce nearly 32 million bales of cotton in 2010-11, against 28 million bales in 2009-10. Indian inflation, after hitting double figures earlier this year because of high food prices, is now in decline, but is still the highest of the Group of 20 nations at 9.97 per cent. "Exports may be capped if September rains hurt the crop," said an analyst with Mumbai-based brokerage Sharekhan. Despite the Pakistan is a major cotton producer country now it will be forced to import the cotton to meet country's mills needs. So India will take benefit of this situation and earn the huge foreign exchange. Now it is the duty of the Pakistan government to give incentives and soft term loans to farmer of the affected areas for sowing the cotton to meet the next year's demand.