Textile mills here have appealed to the Union Government to reconsider its decision to allow additional 10 lakh bales of cotton for exports this year (October 2010 to September 2011).

Southern India Mills' Association Chairman J. Thulasidharan has said in a release that “the announcement came as a rude shock to the ailing spinning sector”. The Group of Ministers decided on Wednesday to increase the cotton export ceiling for 2010-11 crop season to 65 lakh bales from the earlier limit of 55 lakh bales. The Cotton Advisory Board had estimated cotton production to be 312 lakh bales this year. As per the estimates of individual cotton producing States, production is expected to be less than 310 lakh bales.

The carry-over stock was earlier estimated to be 27.5 lakh bales. However, with the additional exports, this would come down to 17.5 lakh bales. This would create shortage of cotton for textile mills at the end of the year (August-September, 2011) and push the cotton prices up. This would, in turn, affect the entire textile value chain. The main strength of the cotton yarn manufacturing countries, such as China, was a comfortable stock-to-use ratio.

Cotton farmers sold most of the produce by the end of March and the decision to permit additional exports would benefit only a few traders, he said.

Secretary of South India Cotton Association K. N. Viswanathan said international enquiries for Indian cotton were few and domestic trading was also at minimum levels on Thursday. Price of Shankar-6 variety of cotton was quoted at Rs.43,000-44,000 a candy on Wednesday and it remained almost the same on Thursday. The impact on the prices because of the announcement might be known only when the export procedures for the additional quantity were notified, he said.