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'Donot meddle with market forces' – CEO, NSL Textiles

16 Jun '11
4 min read

“Now it looks like, when textile enterprises bought cotton, thinking it may last till July-August, may go on up to October, when the next season cotton begins.

“So, allowing cotton exports at this stage, even if one wants to support the farmers or whosoever is holding the stocks of cotton, may not give the intended results of stabilizing the prices from the point of view of either farmers or spinners and cotton or yarn prices.

“And this is because it is wrongly timed. In fact, the opposite may happen. When they allowed yarn exports from April 1, actual yarn prices fell, even in India. And therefore even allowing cotton exports now, when the world demand is stagnant and cotton stocks are adequate with various mills, one may find that cotton prices may actually drop internationally.

“This is because you are putting in one million additional bales of cotton into international market when there are no takers. So, in all, I would say that while the government's intention would have been noble from the point of view of increasing exports or from the point of view of helping the farmers, the entire textile value chain from cotton to apparel has been unnecessarily disturbed. And it looks like it will take another 2-3 months for it to stabilize”.

To conclude, Mr Mantagani had a simple message.

“When everything is okay, do not try to meddle and fix it. Over the last 6-7 years, cotton production, yarn production, yarn exports and cotton exports have all been left to market forces, which has been quite good.

“In trying to meddle with it, with an objective of protecting the domestic garment industry from the yarn prices, we have achieved nothing actually. The domestic garment industry which was the main focus for support is, in any case, suffering because of excise duty hike”, he concluded this very informative interview by saying.

Fibre2fashion News Desk - India

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