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Whom to blame- Increased acreages or fallible policy?
Jun '11
Cotton players in the country are not able to find relief by any means. Even good crop this year in Indian cotton market has come to no aid of the industry makers due to various anomalies in trade policies and inability of policy makers to strike right policy at a right time.

Acreages wise the figures of crop have been pleasing though. However, on the contrary, fallible export policy amidst abundance of cotton has placed ginners, traders and spinners in tight position as it has resulted into sudden fall after steep rise of prices of this commodity leading to total chaos amongst those who had purchased it on higher prices driven due to heavy demand in the market then.

“Our industry is going in the dark due to the bad implementation of the policy of exports. Our Government should not discourage the export policy of yarn as well as cotton.

“This is very unfortunate on part of our Government as they have suspended export of cotton and yarn due to which our industry is going through tough times. All our millers, ginners and farmers are also incurring heavy losses,” acclaims Mr Bhagwan Bansal, President of Punjab Cotton Factories & Ginners Association.

Further he forewarns that now when country has sufficient stock to export i.e. about 65 lakh bales of cotton, the policy should be revised to allow exports quota to 30 lakh bales instead of 10 lakh bales, otherwise the market will fall flat and people will incur heavy loses on entire value chain.

Mr Vinod Ahuja, CMD, VRA Cotton Mills Pvt Ltd agrees with Mr Bansal while he describes-“This year cotton production has been huge in India. When there were times that we could easily export it and global market was accepting everything on the hard side, be it cotton or yarn, there was a mistake that cotton exports were restricted or banned and so were the yarn exports.”

He narrates that there is tremendous bearish sentiment and both the commodities are going down day by day. Looking at the higher prices, farmers had sown larger areas under this crop which will again affect the next season i.e. 2011-12.

So, now the government has to formulate some policy in which they should be having total free economy, Mr Ahuja recommends. “Everything should be under OGL (open general license). It may not recover the prices but further fall can be controlled which is very important,” the CMD adds.

Along with this, he also advocates some penalty norms for export applications to be brought in so that the players who are not genuine do not plunder in as it happened formerly.

“If India does not export to countries like Bangladesh, Pakistan and China, they will outsource it from other countries like Brazil, Australia, Uzbekistan, North America, etc. So why choke farmers in India..?” he seeks answer from the policy makers.

Fibre2fashion News Desk - India

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