Who benefits from the embargo on Indian cotton?
Audio 01:43
Freshly picked cotton in the hands of a young farm worker, near Sardargarh, Rajasthan, India.
(Illustrative image) Getty Images - David Clapp
By: Marie-Pierre Olphand Follow
5 mins
The embargo on Indian cotton, decreed in 2019 by Islamabad for political reasons linked to the status of the Kashmir region, was almost lifted at the end of March.
But the authorities finally did an about-face.
While waiting for the resumption of trade, some are coping very well with the situation, in particular Brazil.
Publicity
When all is well, and trade borders are open, Pakistan buys half of its cotton from India.
A proximity cotton, which can be delivered in 20 days, a maximum of one month, and above all very inexpensive.
Since the embargo, Pakistani spinning mills have had to switch to other markets.
A change of course that benefits African, American and Brazilian cotton above all.
In 2019, Brazilian cotton represented 6% of the Pakistani market, in 2020 this share jumped to 25%.
In five years, exports have tripled.
Brazilian strategy at work
But it's not the Pakistani call for air that explains everything. There is also Brazil's strategy, clearly assumed to conquer Asian markets. This expansion project even has a name: Cotton Brazil. "
Pakistan is one of the eight target countries of Brazil whose objective is to become the world's leading exporter of cotton by 2030, passing the United States
", explains Olivier Antoine, geopolitologist, expert
on cotton
issues. agriculture and food in Latin America.
The embargo on Indian cotton does not only benefit Brazil.
It is also a boon for some traders.
"
Buying cotton from India is a daily headache
", confides a Pakistani intermediary, "
because of the unreliability of the sellers, the random shipments and the lack of compensation in case of litigation
", explains t- he.
Problems that do not arise, or much less, in a better regulated international market, specifies our interlocutor.
Small Pakistani spinning mills suffer from embargo
Those who suffer, especially from the lack of this cheap Indian cotton, are the small Pakistani spinning mills, those which supply the local market. An Indian trader says they were the first to place orders at the end of March, during the few hours when everyone believed the embargo was going to be lifted. Sign of a real need. Especially since the last Pakistani harvest was historically low: 8 million bales for a consumption of 13 million bales. This prompted Pakistan to buy even more cotton last November, a boon for all operators who had a surplus of cotton to sell because of the confinement. Even the poor American quality - a mixture of silk - has found a buyer, says a French trader.
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