Suspend registration of new cotton export contracts - TEA

09 Nov '09

4 min read

floods in major cotton producing States such as Maharashtra, Andhra Pradesh and Karnataka and water scarcity in the Northern States. Therefore cotton production this year is expected to decline at least to 280 lakh bales which would be 25 lakh bales lower than CAB's estimate and 10 lakh bales lower than last year production of 290 lakh bales. On the other hand, there has been some recovery in the economies of North America and West Europe which are major markets for our textile products and therefore cotton consumption in the country is expected to increase this year. It is essential to maintain a reasonable stock-to-use ratio and to provide for a comfortable ending stock to ensure cotton availability and price stability in the market. Thus, the country is unlikely to have any exportable surplus of cotton this year.

Government introduced registration of export contracts for cotton last year and therefore the Textile Commissioner is in a position to suspend cotton exports by suspending registration of export contracts, without any other procedural requirements. Already export contracts for over 10 lakh bales have been registered with the Textile Commissioner from the current year's crop and another 10 lakh bales are reportedly with the traders for registration. Suspending cotton exports temporarily will help the knitwear garment sector to sustain in the global export market.

We shall therefore request the Hon'ble Minister's intervention to immediately suspend further registration of cotton export contracts at least up to the end of February 2010. The situation can be reviewed after that, when the trends of production and consumption would be clearer and an assessment can be made if any exportable surplus is available.

TIRUPUR EXPORTERS ASSOCIATION

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