Coming down heavily on the government for ‘premature' announcement of opening of cotton exports for the coming cotton season, the textile industry has urged the Centre not to allow registration of contracts for the export of the raw material till January next.
In a joint letter to Prime Minister Manmohan Singh and other senior Cabinet ministers, leaders of the industry complained that the government's announcement that cotton exports were being removed from the restricted list had resulted in a steep hike in cotton prices, of about Rs.6,000 a candy, within just a few weeks.
Addressing a press conference here on Monday, the leaders, led by Chairman of the Confederation of Indian Textile Industry Shishir Jaipuria, said the hike had dealt a severe blow to the industry as it came on top of the growing shortage of the commodity due to exports of over 83 lakh bales during the current [2009-10] cotton season.
“Shankar-6, which is the standard cotton, is being sold at Rs.40,000 a candy as against Rs.23,000 a candy at the beginning of the season. But, even at this price cotton is scarcely available,'' they said. There was, they said, a need to bar registration of contracts for cotton exports till January so that the best cotton was available to the domestic industry.
Likewise, there was a need to ensure that contracts were registered only for exports to actual users to avoid stock transfer among traders and hoarding and to bring cotton exports under the restricted list. There was, they said, also a need to hike the export duty to Rs.10,000 a tonne and to withdraw the incentive of 1.5 per cent given to cotton exporters.
Noting that global demand for cotton was expected to go up in the coming months because of shortfall in production in China and Pakistan, they said the domestic industry should have the first charge on cotton produced in the country, instead of China and other competing countries.
Apart from Mr. Jaipuria, the letter had been signed by leaders of the Apparel Export Promotion Council, the Cotton Textiles Export Promotion Council, the Indian Spinners Association, the Federation of Indian Exporters' Association and the Handloom Export Promotion Council.