India tags cotton export with transshipment issue
India wants to tag its cotton export to Bangladesh with unconditional
and bank guarantee-free transshipment facility through Ashuganj river
port.
India raised the issue at a two-day commerce secretary-level meeting
that concluded in New Delhi Thursday, a high official of the commerce
ministry who participated in the meeting told the FE Friday.
Bangladesh Commerce Secretary Md Ghulam Hussain and his Indian
counterpart Rahul Khullar met to discuss matters relating to
strengthening bilateral trade ties, eight years after the last meeting
between commerce secretaries of both the countries.
Bangladeshi representatives sought uninterrupted export of at least
1.5 million (15 lakh) bales of cotton every year. But India linked the
cotton export with uninterrupted transshipment of river vessels from
Haldia port to Ashuganj.
Both the sides agreed to hold further discussions by end of May this
year on this matter.
India may sell cotton to Bangladesh through a contractual agreement
between the Cotton Corporation of India and its counterpart here if
Dhaka agrees to Delhi's demand.
At the meeting, India stated that it was facing problems in using
Bangladesh waterways. India said that all feasible transshipment may
be allowed to continue with the existing infrastructure at Ashuganj
port without waiting for its upgradation. Movement of food grains for
Tripura may also be facilitated.
On March 5 this year, India imposed a ban on cotton exports but the
decision was rolled back following political pressure from India's
ruling Congress Party and its key coalition partner Agriculture
Minister Sharad Pawar who heads the Nationalist Congress Party.
India is expected to produce a record 34 million bales of the natural
fibre in crop year (July-June) 2011-1200.
The spinners in Bangladesh will face a severe blow to their operations
if there is any disruption to cotton export by India. Bangladesh is
one of the major consumers of Indian cotton, businessmen said.
The current monthly consumption of cotton in Bangladesh stands at
60,000 tonnes, people involved in the industry said.
According to media reports, the Indian decision has affected the
cotton prices in the international markets.
The prices, which were at 90-91 cents per pound even a few days back,
jumped by 7.0 per cent in the New York futures trading Thursday.
India slapped the ban for the first time this year. Temporary bans
were earlier imposed several times during the last two years.
President of Bangladesh Textile Mills Association (BTMA) Jahangir
Alamin said such bans are taking place regularly over the last few
years, taking a toll on the Bangladeshi industries.
Sources said India's decision to impose ban on its cotton export
resulted from their research team which found that China and Malaysia
started stockpiling cotton by importing it from India.
Over the years, China has emerged as the single largest cotton
consumer, accounting for almost 40 per cent or 43.5 million bales of
the total global consumption of 108.72 million bales in 2011-12.
And India, with an almost similar population of slightly over one
billion, consumes 19.5 million bales.
Bangladesh, while trying to expand its textile sector on a globally
competitive basis, is, however, precariously positioned, as it has to
import its total volume of raw cotton requirement, between 3.5 and 4.0
million bales, a year.
Over the last three years, India has emerged as the major source of
cotton for Bangladesh, mainly because its quality of cotton has
improved, and the transport cost from India is cheaper than that from
any other foreign source.
Although the US and Canada have a substantial surplus of over 15
million bales, freight charge and lead-time for procurement are both
higher in case of imports from those countries.
Moreover, Bangladeshi importers need to get their letters of credit
(L/Cs) confirmed by an international bank which costs 3.0-4.0 per cent
in extra amount of money. With India, this does not apply.
http://www.thefinancialexpress-bd.com/more.php?news_id=125179&date=2012-03-31
------------------------------------
[Disclaimer: ALOCHONA Management is not liable for information contained in this message. The author takes full responsibility.]
To unsubscribe/subscribe, send request to alochona-owner@egroups.comYahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/alochona/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/alochona/join
(Yahoo! ID required)
<*> To change settings via email:
alochona-digest@yahoogroups.com
alochona-fullfeatured@yahoogroups.com
<*> To unsubscribe from this group, send an email to:
alochona-unsubscribe@yahoogroups.com
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/