All Pakistan Textile Mills Association (APTMA) recently stated that, exporters in India have cancelled orders for exporting 200,000 cotton bales to traders in Pakistan. This is despite confirming these very orders.
Shahzad Ahmad, an APTMA member divulged that, Pakistani traders placed orders for importing 522,000 cotton bales which were confirmed by Indian exporters, but now Indian exporters have invalidated orders to the tune of 200,000 bales.
He further stated that, the Pakistani traders now will have to pay a price of around 59 cents per pound for importing cotton from India, which is far above the price at which the orders were originally placed.
Lint importers from Pakistan are now planning to take help of the arbitration service offered by the International Cotton Association (ICA) to resolve this issue of cancellation of orders by exporters in India.
Indian exporters annulled these confirmed orders of Pakistani traders without providing any justification for the same, causing the Pakistani traders to suffer heavy financial losses, he said.
Ahmad said that, cancelling orders in such a manner amounts to sheer infringement of ICA, Liverpool’s rules and regulations, meaning breach of contract at international level.
Pakistani traders originally booked the orders at a price of 54 cents per pound, against which the Indian exporters are now demanding a price of $1.05 per pound. Thus, now in order to meet its urgent need of cotton, the textile sector in Pakistan will have to import from other countries, which means the sector will have to bear an extra burden of $970 million.
Prices of cotton in India surged by around 50 percent, and as the Pakistani orders were cancelled for the reason of disparity in import prices, this has further hiked the lint prices in domestic market.