TN millers plead for restriction on excessive cotton export

24 Jun '08

2 min read

Low availability of cotton and yarn in the domestic market coupled with unreasonably high prices has forced a large number of textile manufacturing units to shut down operations and mills in Tamil Nadu are the worst affected by this inflationary trend.

Manufacturers in the state are in such a dismal state that they have gone to the extent of suggesting the Government to introduce a system of quantitative restriction on export of cotton.

It has been unanimously agreed by market experts that export of cotton should be limited to 75-80 lakh bales as this would leave the local markets with sufficient supplies for their own textile production.

Since the state accounts for 1,250 spinning mills of the 3,040 mills existing in the country, it is not difficult to see why it is the most adversely impacted by sky-rocketing cotton prices. Tamil Nadu accounts for about 47 percent of the country's total requirement of 240 lakh bales.

India recorded an average of 325 lakh bales of cotton production in the period 2007-08 of which 85 lakh bales were exported while the remaining 240 lakh bales were left for domestic market consumption. Needless to say, the supplies were far from being even sufficient and this is quite contradictory considering the fact that the country had a surplus production this year.

Besides, rupee appreciation, a hefty increase of nearly 15 percent in the prices of yarn has also contributed to the woes of the industry. The government on its part has withdrawn sales tax on hank yarn and is providing free power supply up to a fixed consumption to ease the burden of the industry.

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