The government and the industry both are closely watching the situation on cotton exports in order to fulfill the domestic demand and make the textile & clothing industry competitive in the global markets.
Speaking to SME Times in this context, D.K Nair, Secretary General, Confederation of Indian Textile Industry (CITI) said, "The government and the industry at the moment are closely watching the situation of cotton in India. Any necessary changes in the cotton exports from the country will only be taken depending on the requirements."
When asked whether the government will favour exporting cotton beyond the export limit, he added, "I do not think they have proposed anything like that. We have met the Textile Minister and he indicated that it won't be there."
He said that as of now the government is not thinking to export beyond the stipulated amount of 55 lakh bales, but it depends on the domestic demand which has to be met at first and then decision may be taken on the surplus cotton, if any.
Further, it also depends on what will be the output and what kind consumption will take place. However, he expects the output to be the same as earlier. Moreover, as of now there is no such issue, and there is no indication from the Ministry right now to export cotton beyond the limited amount, he opined.
The projected amount of cotton production in India is estimated to be 32.5 million bales for this fiscal.
Also, the Northern India Textile Mills' Associations (NITMA), President, Ashish Bagrodia and the Managing Director of Winsome Textile Industries Limited said, "The Government has allowed exports w.e.f. 1st November, but there are not enough arrivals due to delayed rains even for the requirements of the domestic industry, so where is the question of the surplus bales being available for exports."
"The Government should immediately notify export of cotton only from January 1, 2011," he added.
He suggested, "More than 55 lakh bales should not be allowed to be exported at any cost, since the consumption of the industry as per our own estimates is going to be more than 266 Lac Bales (estimated in the last meeting of the CAB)."
Further, a carryover of only 55 lakh Bales is being proposed, a stock to use ratio of only 20%, which is far below the world average of about 40%. Any further clarity on increased production will only be available after March 2011. and thereafter only, further decision should be taken, he said.
"Any exports more than 55 lakh bales, if any, must be with export duty keeping in mind the cotton security for the country," Bagrodia added.
While, the textile commissioner has recently suspended cotton exports registration saying they have received applications equivalent to the quantity earmarked for this season that is 5.5 million bales.
The price of cotton has been increasing in recent months but it is expected to stabilise in the coming weeks. Currently, the cotton prices in the domestic market are ruling over 65 per cent higher than Rs 22,400 (per candy) in the same period last year.
The ministers' panel has decided to permit registration of cotton export contracts with the Textile Commissioner from October 1, but actual export shipments would be allowed only from November 1.
