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Pakistan lifts ban on Indian cotton and sugar imports

Economic Coordination Council approves importing the two commodities to curb domestic price rise.

Chintu Das

According to government reports, Pakistan has abolished a two-year-old ban on Indian sugar and cotton imports, resuming suspended trade between the two nuclear-armed neighbors.

According to public officials, Pakistan's Economic Coordination Council, a key decision-making entity, enabled the private sector to import 0.5 million tonnes of white sugar on Wednesday as Islamabad tries to keep domestic prices under control.

As per 5 traders, Pakistani buyers have already begun inquiring about purchasing Indian sugar and cotton, which is being sold at cheaper prices than supplies from other countries.

India is the world's largest cotton producer and the world's second-largest sugar producer. Exports to its neighbor would help Pakistan lower soaring sugar prices ahead of Ramadan by reducing surpluses that are weighing on its local markets.

Slow thawing of ties

The move comes as ties between the two neighbors, who have fought three wars since gaining independence in 1947, are gradually warming. Last month, the militaries of both countries issued a rare joint statement, declaring a ceasefire along a disputed border in Kashmir.

"We're doing price checks on sugar and cotton," said the India head of a global trading firm, who did not want to be named due to company policy. Pakistan has been trying to break into the international sugar market, and has recently issued two tenders totaling 50,000 tonnes. In March, it turned down bids on both tenders. According to European traders, the first tender offer was valued at $540.10 per tonne on a cost and freight basis (C&F), and the second at $544.10 per tonne. As per a dealer with a global trading company, India is selling sugar at a lower price than Thailand.

"Pakistani merchants have been purchasing Indian sugar for Afghanistan from their agencies in Dubai. Pakistan will unload shipments in Pakistan if it requires imports from India ""said the dealer." Merchants say they've been selling Indian white sugar on a free-on-board (FOB) basis for $410 to $420 per tonne, a major discount to Pakistan's domestic price of $694 per tonne.

As per the dealer, Indian exporters could ship by sea or land, giving them a major advantage in the face of tight global container shipping markets. Pakistan was a major consumer of Indian cotton till 2019, when Islamabad imposed a ban on importation after New Delhi abolished the privileged status of Pakistan's subsection of Kashmir, which both nations claim.

According to Arun Sekhsaria, managing director of exporter D.D. Cotton, "Indian cotton will be at least 4 to 5 cents per pound economical for Pakistan than supplies from other countries."

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