The Southern India Mills’ Association (Sima) has urged the Centre not to register any more contracts for export and ban exports for cotton season 2009-10.
“The actual cotton production would slip to 26 million bales (one bale is 165 kg) this year, as against 29 million bales produced during the last season due to drought and floods in all major cotton-growing states. Of the production during 2009-10 season, only around 16 million bales are expected to be of above average quality. If this cotton is exported as against the domestic requirement of 24 million bales, the Indian textile industry would lose its competitive edge in the global market,” R K Agarwal, member of Sima, and chairman of AP Spinning Mills Association, told reporters here on Tuesday.
Inferior quality cotton of 10 million bales during the present season would increase the cost of production by almost 10 per cent.
This is when the industry is already spending over 10 per cent of its cost on transportation for bringing the cotton from upcountry centres to consuming destinations as against 5-6 per cent spent by competing countries like China and Pakistan, he added.
Agarwal said global cotton traders, who had established themselves in cotton-growing under-developed countries in Africa, have made inroads into the Indian markets taking advantage of the removal of cotton textiles from the Essential Commodities Act from December 24, 2006.
“As a result, the Indian textile mills are paying a 30-40 per cent higher price for Indian cotton.”
A Sima delegation would meet Union textiles minister Dayanidhi Maran in New Delhi on November 11 to make a representation on these issues. “We are asking the central government to announce a proactive cotton policy and create a level-playing field to enable the Indian textile industry to have a healthy competition with competing countries like China, Pakistan, Thailand, Sri Lanka, Bangladesh and Indonesia,” Agarwal said.
The Indian textile industry made an investment of over Rs 160,000 crore during the last decade for technology upgrade and capacity addition. It presently provides direct and indirect jobs to 5 million across the country.