KARACHI, Jan 15: India, which was emerging as the biggest buyer of Pakistani raw cotton, has banned cotton imports from Pakistan because of disease worries, according to a letter sent by the Indian Ministry of Agriculture. The letter, obtained by Reuters from the Karachi Cotton Association, said the ban went into effect from January 11."There shall be no import of any cotton from Pakistan into India as the presence of cotton seeds of exotic origin, of dried leaves and their stalks in the imported consignment carry exotic strains of destructive bacterial, viral and fungal disease which are virulent under Indian climatic conditions," said the letter signed by Rita Sharma, joint secretary of the ministry.Trade sources said Pakistani traders had already signed contracts to export up to 250,000 bales of cotton to India, of which 40,000 bales had already been shipped.They said Pakistan, expected to produce more than 10 million bales of 375 lb each for the fiscal year to June compared to 8.7 million bales last year, was looking toward India as its biggest potential market for an estimated export surplus of one million bales.India's ban on Pakistan's cotton imports is likely to put the brakes to a rally on the Karachi Cotton Exchange which was powered by textile buying and rising export contracts, traders said on Friday.But they said rising international prices would prevent a major fall in prices. "Surely this will hit the bullish mood of the market," said Maabool Sadiq, chairman of the private Karachi Cotton Association. But Sadiq said the charge that Pakistani cotton was carrying some sort of disease was "rubbish", adding the government should counter the allegation. "It could be political or because of domestic trade concerns. We haven't heard of any complaints from elsewhere," he said.Trade sources in Karachi said Pakistani traders had already signed contracts to export up to 250,000 bales of cotton to India, of which 40,000 bales had already been shipped. Pakistan and India, which have fought three wars, have in the past imposed tariff barriers to restrict imports of commodities such as sugar and soyabean meal.The ban comes amid hectic buying activity in the market supported by textile mills, the state-run Trading Corp of Pakistan and exporters. But some traders said the ban was unlikely to affect prices because internationally cotton prices were rising.March cotton futures on the New York Cotton Exchange rose to a 2-month high of 54.75 cents a pound on Thursday, up 1.03 cents form the day before. "Exporters will find good markets elsewhere but the allegation that Pakistani cotton is carrying a disease is a worry for the reputation," said broker Aziz Abdullah.He said the ban has so far made little impact on prices. Increased supplies pulled prices down sharply earlier in the season. Officials estimate this year's cotton crop to hit an 11 million 375-lb bales output target.Tea imports upCALCUTTA: The Union commerce ministry and the tea industry are worried over the steady increase in tea imports over the last year, with conflicting data adding to the confusion. Though official figures have not been released, the industry, in the form of the Indian Tea Association, reckons that imports have shot up to 15 million kg during calendar 1999 from 8.93 m kg the previous year. A leading auction buyer said that imports during 1999 were not less than 20 m kg.
