Textile industry seeks export curbs on cotton

New Delhi, Nov. 23

Amid rising cotton prices, the textile industry has reiterated its demand for the need to restrict cotton exports during the year to the 5.5 million bales announced by Government.

Out of this amount, for which export contracts have already been registered, any quantity that remains unshipped within the stipulated last date of December 15 should not be allowed for shipment or fresh registration at least for the next two months, the Confederation of Indian Textile Industry (CITI) has sought.

According to it, there has been an “unprecedented increase” in cotton prices in India during the last few months. “From Rs 23,000 a candy in October 2009, cotton prices increased to Rs 47,000 earlier this month and have remained around Rs 45,000 thereafter. Allowing exports from November 1 is taking away for exports a substantial portion of the crop that is arriving in the market, creating an artificial shortage,” a statement from CITI said.

‘No controls'

CITI has also asked the Government to ensure that any further registration of cotton export contracts is allowed only against Letters of Credit. Also, “no controls” should be introduced on exports or prices of cotton yarn “in the long-term interest of the entire textile value chain,” it has said.

Registration of cotton export contracts was opened on October 1, and the entire quantity of 5.5 million bales earmarked for registration got applied for in ten days.

Most of the registration was on Cash Against Documents (CAD) basis, for which no documents other than a contract was necessary.

(Source: http://www.thehindubusinessline.com/2010/11/24/stories/2010112452581900.htm)