Two major associations in the textile sectors — Confederation of Indian Textile Industry (CITI) and the Apparel Export Promotion Council (AEPC), are once again on a collision course.
This time it is over the Government's decision to impose a quantitative restriction on the export of cotton yarn. The announcement was made on Monday. While AEPC has wholeheartedly welcomed the Government's decision, CITI has come down heavily on the decision.
In a statement, AEPC Chairman, Premal Udani, said, “This decision has brought great relief to the value-added apparel and made-up sectors.”
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Profusely thanking Finance, Commerce and Textile Ministers for “accepting the view point of AEPC”, he expressed the hope that the cap would help increase the availability of yarns for domestic apparel manufacturers and exporters and bring “some stability to the out of control yarn prices.”
Taking a diametrically opposite view, CITI Chairman, Shishir Jaipuria, decried that the quantitative ceiling in yarn exports would have “far reaching adverse consequences for all the segments in the textile industry.”
Pointing out that there was a large number of spinning mills with export obligations against EPCG licences and cotton import against advance licence and by EoUs (export-oriented units), he said the spinners would be faced with displeasure both from their domestic customers as well as the international clients since as per the new rule, exports have to be executed within the next 45 days.
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Urging the Centre to reconsider the decision, he said that the quantity of around 60 million kg for which applications have already been accepted by the Textile Commissioner before the cap was announced should be cleared immediately, on the ground that it would be “unreasonable to apply the quantitative ceiling retrospectively.”
Will lead to rise in yarn prices: SIMA
M. Soundariya Preetha writes from Coimbatore:
The Union Ministry of Textile's decision on Wednesday to stop cotton yarn export registrations for 2010-11 has evoked mixed response from different segments of the textile industry.
The Cotton Yarn Advisory Board, constituted in September, formulated the cotton yarn balance sheet that indicated cotton yarn exports for the year to be 720 million kg. A release from the Ministry has said that in the backdrop of the increased domestic demand and to address the price volatility, the Government has decided that there would be no further registration of cotton yarn exports beyond 720 million kg. All applications in the pipeline above the registration of 720 million kg would not be considered by the Textiles Commissioner.
Tirupur Exporters' Association president A. Sakthivel said this would help bring down yarn prices and yarn would be available in adequate quantities for the domestic yarn consuming sectors such as garments, handlooms and made-ups.
Southern India Mills' Association Chairman J. Thulasidharan has said in a release that the decision would lead to rise in cotton yarn prices till January 2011. It would create shortage in availability of cotton yarn in the domestic market as those who had registered should export within 45 days. Of the 720 million kg of yarn registered for exports so far, only 455 million kg was shipped. Mr. Thulasidharan suggested revalidation of the Export Authorisation Registration Certificates already issued to control speculation of yarn prices and streamline yarn exports.