Indian textile lobbies disfavor ban on cotton exports

This will sound like music to the ears of cotton importing countries like China, Bangladesh or Vietnam and also to exporters of the white gold from India.

Leaders from opposing Indian lobbies – both the raw cotton and the textile industry associations, opine that India should not ban or put a cap on raw cotton exports, in the current cotton season, despite a fall in output.

The Indian Textile commissioner recently said that Indian cotton output may be down in 2012-13 by around five percent to 33.4 million bales of 170 kg each from 2011-12’s production of 35.3 million bales. This figure is likely to further fall or rise in future estimates.

There are apprehensions that the Indian government may ban exports of cotton or put a cap as in previous years, due to the fall in cotton production.

However these fears were misplaced as both the cotton producers’ trade lobby as well as the textile mills trade lobby vehemently opposed a ban or cap on exports of the white gold.

Mr DK Nair – Secretary General of Confederation of Indian Textile Industry (CITI), which represents the Indian textile industry said, “We have represented to the Indian government not to restrict exports of cotton in the current season”.

Giving reasons for the same, he explained, “We want the government to pursue an open general license (OGL) policy and let the cotton markets follow its own course, as uncertainty does not help anybody.

"The best situation for the Indian textile industry is to have free exports and imports of cotton, yarn or fabrics. Secondly, we do not foresee a shortage of cotton, so we do not see any reason for the government to ban or cap cotton exports.”

Indian Cotton Federation (ICF) Secretary – Mr Vishwanathan said, “India should not ban cotton exports as cotton inventories are very good in the country, as our consumption has gone down drastically. There will be enough bales for exports.”

He added, “Power cuts have crippled operations in Tamil Nadu, which accounts for 50 percent of installed spindles in India. The Indian cotton yarn market too is presently sluggish. Cotton yarn exports are growing but since local market is slow, spinners have no option, but to export at low prices.”

Secretary General of South Indian Textile Association (SIMA) - Dr K Selvaraju which represents interests of mills in Tamil Nadu and other Southern states too was very forthcoming when he said, “Cotton imports by China are foreseen to fall, which could impact Indian cotton exports in the season.

"Secondly, global cotton stock use ratio in this season is expected to be 74 percent, the highest in recent years. So I do not foresee any shortage of cotton in India, which does not entail banning or capping Indian exports of the commodity.”

Source: Fibre2fashion