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TEA appeals to impose ceiling on cotton exports
Nov '09
Further to Government decision to continue the Cotton Exports, Shri. A.Sakthivel, President, FIEO / TEA met the Hon'ble Union Minister of Textiles, Thiru. Dayanidhi Maran (26.11.2009) in New Delhi and submitted a memorandum with a requisition to impose a ceiling on cotton exports, 4 lakh bales monthly and 50 lakh bales annually.

Shri.Sakthivel suggested that with a view to strike a balance between the need of exporting limited quantity of raw cotton and availability of the same to exporters of Fabrics, Made-ups and Garments, Government may consider to allow 50 lakh bales for exports in a year with monthly ceiling of 4 lakh bales so that Raw Cotton Exporters ensure regular export supply to maintain their markets and simultaneously ensuring adequate supply of raw cotton at reasonable price to end user domestic industry.

Shri.Sakthivel said exports of Readymade Garments are continuously exhibiting decline and in the month of October 2009, the same has plummeted to 30% as compared to October 2008. He pointed out that one of the main reasons for the decline in exports has been the out pricing of Indian garments by countries such as China, Sri Lanka, Bangladesh, Vietnam, Turkey etc.

Shri.Sakthivel added that India is being out priced in international markets due to hike in Raw Cotton Prices which has resulted in increase of prices of woven cotton fabrics by 15 – 20% and the Cotton Yarn, required for Knitted Garments, by 10 – 15%. However, due to global slowdown and the fierce price competition, the garment exporters are unable to factor these hikes in the garments pricing.

Shri.Sakthivel is apprehensive that the Cotton Prices will increase further as there are reports that nearly 20 lakh bales have been bought by traders for exports. Moreover, with the floods in major cotton producing States such as Maharashtra, Andhra Pradesh and Karnataka, cotton production is expected to decline to about 280 lakh bales, which will be 10 lakh bales lower than last year's production. On the other hand, with slow recovery in US & EU, cotton consumption is expected to increase in these regions.

The hike in cotton prices will force many Textile Mills to close down thereby affecting weaving units as well as end use consumers such as fabrics, made-ups and garments exporters. It will have seriously implications for employment as textiles is the largest employment provider, next only to agriculture.

Shri.Sakthivel said if an immediate decision is taken in the matter for the benefit of both raw cotton exporters as well as exporters of value added products who on an average provide 500 to 700% value addition as raw cotton exports yield about Rs.65 per Kg. whereas exports of garments fetches about Rs.450 per Kg.

Shri.Sakthivel requested to consider the suggestion and put a ceiling on export of raw cotton and the ceiling may be monitored through the Textile Commissioner who can also endorse Shipping Bills for adhering to monthly ceilings.


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