Spinners Likely To Import 100,000 Bales Of Cotton By Oct End

Several spinners intend to import cotton in view of higher prices of local cotton which have risen sharply in the last couple of weeks.

Cotton prices have spiralled in the domestic market because of a sudden surge in the demand (by the local spinners) and New York cotton futures amidst reports of unspecified short crop in China.

"We expect that spinners are going to open LCs for the import of about 100,000 bales by the end of October. The imported cotton would cost about Rs2,700 per maund (37.5kg) as compared to our own local cotton whose price is hovering around Rs3,000 per maund," an Aptma member said. He said imported cotton also had an additional advantage over local cotton: it contains less moisture and trash.

It is being guessed that the spinners plan to place orders for around 1-1.5 million bales (of 170kg) in the next three months or so in order to stabilize local prices at what they call "rational level" and put an end to the panic that has gripped the market in the last few days.

"The industry won''t remain viable if the price of cotton stays at the current level (of about Rs3,000 per maund) or further jacks up. It will result in bank defaults," said a miller while talking to this reporter on Saturday. He was of the opinion that the rate must come down to last year''s higher level of Rs2,600 per maund if the industry, especially weaving, was to sustain the pressure and remain viable.

When pointed out that most spinners were in favour of the free market mechanism, he said he did not oppose it. "But we also need to take measures to safeguard our industry. We don''t want growers to lose in the wake of higher international cotton rates. However, it should also be realized that they''re getting almost double the support price of Rs800 per maund fixed by the government. They''re already selling phutti for Rs1300-1400 per maund. They are making money. Why shouldn''t we get the relief just to stay viable," said the spinner.