Textile sector for cotton export regulation

Production

Exports

2002-0313.60.08 2003-0417.91.21 2004-0524.31.00 2005-0624.44.7 2006-0728.05.8 2007-0831.58.5  PD Patodia, chairman, Confederation of Indian Textiles Industry (CITI), said, "Unchecked cotton exports is not healthy for domestic firms. The government has to give heed to industry's concern." 
 

PRICES OF SHANKAR-6
	(Rs/Candy)
	2006-07	2007-08
Oct	18,679	19,761
Nov	18,216	19,736
Dec	17,978	19,708
Jan	17,711	20,801
Feb	19,398	21,370
Mar	19,216	22,282
Apr	19,782	22,107
Source : Cotton Advisory Board (CAB)

 Cotton exports, this year, will constitute 27 per cent (a rise of 6 per cent over last year) of cotton production which according to the latest estimates of Cotton Advisory Board (CAB) is 31.5 million bales. Moreover, the latest statistics from the International Cotton Advisory Committee (ICAC) indicate that in 2008-09, cotton exports from India will reach 9.6 million bales.  "Domestic firms are suffering due to high cotton prices. In particular spinning sector will be at the receiving end. If cotton rates do not cool off, it will definitely affect the profit margins by 5-10 per cent," said P Nataraj, managing director of the Tiruppur-based KPR Mill.  The prices of Shankar-6 variety of cotton is currently ruling at Rs 24,500 a candy (1 candy = 356 kg) which last year around this time was around Rs 20,000 a candy. Industry sources said that by the end of this month or in June, the prices could cross Rs 25,000 a candy mark.  The textiles industry, in its presentation to the government, has asked to put a curb on exports in order to keep a check on prices.  KK Baheti, president and CEO of Birla Cotsyn, part of the Yash Birla group, said, "The rising cotton prices would have an impact of 10 per cent on the profit margins and industry is going to suffer on that account."  However, certain section of the industry said that it is not so that enough cotton is not available. "If the country has produced much more than consumption, there is no logic why it should not be exported," said KF Jhunjhunwala, director, Cotton Association of India.  AK Agarwal, executive director of Hyderabad-based Suryajyoti Spinning Mills, said, "Government needs to intervene. Since, cotton rates have gone up, it is not even the farmers who are making money, rather it is the middlemen cotton supply chain." When contacted, a top official in the Ministry of Textiles, said, "Government is considering the proposals from the industry regarding cotton exports." But he did not divulge further details about when an action was expected.  The over $45 billion textile industry already has had a tough time for over the last year due to steep rupee appreciation. In FY08, the industry could not meet its exports target of $ 25 billion, and ended up at $ 20.5 billion, down 18 per cent.