CITI happy with decision to defer cotton exports

The Confederation of Indian Textile Industry (CITI) has welcomed the decision of central government to defer export of cotton from the new crop by a month to November 1, 2010.

In an official statement, Shishir Jaipuria, chairman, CITI, also welcomed the reiteration that exports would be restricted to the exportable surplus of 55 lakh bales. “We thank the minister of Textiles, Dayanidhi Maran, for resisting the attempts of cotton traders and the Agriculture ministry to overestimate exportable surplus and to commence exports immediately. The estimates of global crop are gradually coming down with the unraveling of the problems that cotton production has faced this year in Pakistan and China,” Jaipuria stated.

 

He said that similar uncertainties were present around India's crop because of excessive rains in certain areas and therefore the approach to cotton exports should be cautious, especially until firm crop estimates and a clearer picture of the increasing cotton consumption in the country are available.

However, the textile industry body is of the opinion that November 1 will be too early to permit cotton exports and that they should be deferred up to January 1, 2011 by which time a clearer picture of the cotton scenario of the season would be available.

“The industry is prepared to pay international cotton prices to Indian farmers and exports should be restricted to the quantity for which the industry was not able to offer international prices to Indian farmers. The interests of farmers are of primary importance and the industry only wanted to curtail speculation in the domestic market,” Jaipuria added.

Apparently, the announcement of exports from November 1 has already resulted in an increase of more than Rs 500 a candy in cotton prices in the country as a reflection of the market sentiments. “Currently cotton prices in India are significantly higher than international prices and the situation will only worsen in the coming months unless a firm announcement is made that exports would be monitored closely and restricted to exportable surplus,” said Jaipuria.

Meanwhile, countries like China, Pakistan and Bangladesh are scouting for cotton at present with their respective governments going out of their way to procure Indian cotton and supply it to their mills at lower prices through visible and invisible internal subsidies.

“Unless our government takes effective steps to ensure cotton security for Indian mills by providing affordable access to our own cotton, without hasty exports, the textile value chain of the country from yarn to garments and made ups and the over 35 million workers employed by them will be hit irreparably”, Jaipuria stated.