The domestic textile industry has expressed concern over the Union Government's move to remove the restrictions on cotton exports with effect from October 1.
The Union Government imposed curbs on raw cotton exports in April this year. As much as 73 lakh bales of cotton were exported from October 2009 to April 2010. Subsequent to the issue of a notification by the Department of Commerce on Tuesday, bringing cotton exports under the category of “free list” from October 1, prices of Shankar 6 variety of cotton shot up to Rs. 32,000 on Wednesday from about Rs. 30,500 a candy on Monday.
Southern India Mills' Association Chairman J. Thulasidharan told The Hindu that “The raw material security of the entire textile value chain is under threat because of this move.” The new cotton season would start from October 2010.
“There are 60 more days for harvest of the crop for the next season. The pre-mature announcement on exports will create a permanent damage to the industry”, he said.
Mr. Thulasidharan pointed out that a meeting of the Group of Ministers held in April decided that steps should be taken to ensure a carry-forward stock of at least 50 lakh bales of raw cotton at the beginning of the next cotton season. However, only 40.5 lakh bales were expected to be the carry-over stock.
Textile mills normally had a stock of 30 to 45 days' requirement of cotton and the smaller mills had just 20 to 30 days' stock. By relaxing cotton exports from October, the domestic industry would be hit as quality cotton would be booked for exports and would not be available for the domestic industry. The Union Textile Ministry should come out with a cotton policy, he said.
D. K. Nair, Secretary General of the Confederation of Indian Textile Industry, said export registrations should start only after determining the exportable surplus for the next season. Further, cotton exports should be calibrated. “The domestic textile industry will collapse with unrestricted export of cotton,” he said.
Textiles Secretary Rita Menon told The Hindu that the Cotton Advisory Board that would meet later this month would take a call on the cotton production estimates for the next season.
