Dhaka, Bangladesh (BBN)- Dhaka and New Delhi may shortly seal an agreement on cotton that will ensure the supply of a fixed minimum quantity from India to Bangladesh every year irrespective of any export ban.
“Bangladesh wants India to commit to 1.5 million bales (170 kg each) of cotton every year, but the final amount is still being negotiated,” Commerce Minister GM Quader told Business Line in New Delhi.
The daily said the deal, which will be at a business-to-business level, is being worked out by the Commerce and Textile Ministries of the two countries.
For India, the Cotton Corporation of India will sign the final agreement, an Indian Commerce Department official told the Business Line.
The price, which will be flexible, is likely to be marked slightly higher than the existing global prices as a premium for the guaranteed supply, the Indian official added.
The premium amount is also being finalized.
“We hope that within the next few months the deal will be through. It will protect textile manufacturers in our country from uncertainties that India’s frequent ban on cotton exports creates,” the Business Line quoted a Bangladesh official as saying.
It said the supply agreement will ensure that even if India imposes a ban on cotton exports at some point of time during the year, it will be obligated to sell at least the committed quantity.
India had imposed a ban on cotton exports last March and stopped exports of even cotton that had been contracted for.
BBN/SSR/AD-02Feb13-8:09 pm (BST)
