Dubious annual exercise, says Narendra Modi

Gujarat Chief Minister Narendra Modi in a letter to Prime Minister Manmohan Singh demanded immediate lifting of the ban, calling it the “centre-textile millers nexus” to hit the poor farmers.

Mr. Modi went further to demand that the export ban should be “permanently lifted” in case of the “Shankar” variety of cotton produced in Gujarat, which had a high demand in the international market, particularly China.

Calling it the Centre's “annual dubious, malicious and deliberate exercise” to ban export just before the harvest season when the cotton prices ruled high in the international market and lift the ban when the prices touched bottom low, Mr Modi said it was done due to the centre's “nexus” with certain textile millers and yarn manufacturers to help them buy cotton from the market at a low price, sometime even less than the minimum support price.

He pointed out that since the cotton growers in the country did not have the efficient means to stock the commodity, the cotton producers were forced to depend on the whims and fancy of the traders, often going for distress sale.

Mr. Modi said Gujarat had worked hard over a decade to develop and improve the quality of cotton for export. “Today, the Shankar variety of cotton is the best accepted Indian cotton in international markets and it can compete with any other variety of international cotton. The cotton prices have come down from Rs.62,000 per candy last year to about Rs.34,000-38,000 per candy this year. The prices were slowly picking up. It is against this background that the Centre has imposed the ban of cotton exports. This will have major impact on the cotton farmers of Gujarat and agricultural economy of the state,” Mr. Modi said.

Pointing out that “the strategy by the industry is open for speculative manipulation in the market,” Mr Modi said last year when India imposed the ban, China released its stocks of cotton in the international market at higher prices “leading to a wind-fall profit”. Actually, this benefit should have gone to Indian farmers,” he added.