Textile firms renew demand for banning cotton exports

With the price of domestic cotton rising and a high level of export contracts, the Confederation of Indian Textile Industry (Citi) has renewed its demand for restricting the latter.

In a letter today to the Union ministry of textiles, it says attention must be given to “available exportable surplus”. And said the situation could be reviewed in March 2010.

“Restricting cotton exports will not affect our ability to export further quantities later, if at all available,” went its letter.

Yesterday, Union textile minister Dayanidhi Maran had said the industry’s demand is being considered abd a decision is likely soon. However, insiders say the ministry of agriculture will have a crucial role in taking any such decision.

“Ministry of Textiles cannot do much on this issue. The stand of the Ministry of Agriculture will be important,” said a senior official of the former.

It was the ministry of agriculture which had pushed hard for the hike in minimum support price (MSP) of cotton back in August 2008 by over 40 per cent, against which industry had protested but in vain.

According to the latest estimates of the Cotton Advisory Board (CAB), the country is expected to export 5.5 million bales (1 bale = 170 kg), a jump of over 57 per cent compared to the previous year’s exports. However, the industry is maintaining that the amount then left for domestic textile producers will be insufficient, meaning a rise in their costs.

At present, cotton prices are ruling firm at around Rs 25,000 per candy (1 candy = 356 kg). During the same period last year, it was Rs 23,000 per candy.

So far, in the current cotton season (2009-10), cotton arrival has reached 3.8 million bales. “Out of which, 2.3 million bales have already been booked for exports,” said Shishir Jaipuria, chairman, Citi.

Total cotton production is likely to be 29.5 million bales, says CAB. However, industry says production is unlikely to exceed 28 million bales.