Pakistan may lift import ban on cotton and sugar from India

Foreign news on March 31, Pakistani government and industry officials said on Wednesday that Pakistan is considering lifting the import ban on Indian sugar and cotton, because Islamabad is trying to control the soaring domestic prices.
 

 

Pakistani buyers have started making inquiries for Indian sugar and cotton as Indian prices are lower than other countries, five traders said.

 

 

Exports to neighboring countries will help India cut a supply glut that is weighing on the country's market, while also helping Pakistan contain its soaring sugar prices ahead of Ramadan.

 

The move comes at a time when relations between the two neighbors are gradually thawing. India and Pakistan have fought three wars since independence in 1947, and relations between the two countries have been strained.

 

Last month, the two militaries issued a rare joint statement announcing a ceasefire along the disputed border in Kashmir.

 

Sugar and cotton imports from India were on the agenda of Wednesday's meeting of Pakistan's top economic decision-making body, the Economic Coordination Committee, according to documents.

 

Pakistan has been looking for opportunities in the international sugar market and has issued two import tenders for 50,000 tonnes last month. But both tenders in March failed.

 

Offers for the first tender (C&F basis) were at $540.10 a tonne and $544.10 a tonne for the second tender, European traders said.

 

Sugar from India is cheaper compared to supplies from Thailand, said a distributor at Global Trading Co.

 

"Pakistani traders have been buying Indian sugar through their offices in Dubai. If Pakistan allows imports from India, they will unload in Pakistan," the trader said.

 

Traders said their Indian sugar offers were priced at US$410-420 per tonne on a free-on-board (FOB) basis, far below Pakistan's domestic offer of US$694.

 

Indian exporters can either ship by sea or by land, the trader said. He pointed out that given the tight capacity in the global container shipping market, this gives India a huge advantage.

 

Pakistan has been one of the major buyers of Indian cotton until 2019. Pakistan has banned imports from India after India revoked the special status of the Pakistani part of the Kashmir region.

 

"For Pakistan, Indian cotton is at least 4 to 5 cents a pound cheaper than cotton from other countries," said Arun Sekhsaria, president of exporter D.D. Cotton.