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Ambiguity upsets cotton farmers
20
Jul '10
The falling cotton prices during times of ambiguity about exports of yarn, has irked cotton farmers.

Since the crop was at a stage of being harvested, Prime Minister, Yusuf Raza Gilana had directed the Ministry of Textile to solve the issue at the earliest possible, so as to bring consistency in cotton prices.

More so, a joint meeting, which was arranged by the ministries of textiles and agriculture with spinners, cotton farmers, ginners and the value-added segment, did not succeed in reaching a decision on the issue of extending duty on exports of yarn.

As per former Federal Minister for Industries and Special Initiatives, removing yarn exports had disturbed the cotton prices. He also said that, it was unjust to subsidies spinners and value-added segment on the expense of farmers.

As per industry experts, cotton farmers sharply refused with the extension of duty on exports of yarn by an additional two months. According to them, cotton arrival in market pick up speed during August and September. Therefore, if duty on yarn exports is extended by two month, then it was more likely that cotton rates would fall steeply, probably below Rs 5,000 level.

Cotton farmers have warned the government of a nation-wide protest, if the market falls badly owing to faulty policies.

Following this, spinners too, apparently have urged the government to opt for a free market policy, wherein no restrictions are imposed on yarn trade, as they said that, they were the worst hit with imposition of duty in the last fiscal. Even the ginners have warned of reactions like no purchase of Phutti if the current policy continued.

While various options are being looked in to by the government to solve the problem, one of the suggestions however, is to lessen the duty on exports of yarn from the present 15 percent to 7.5 or 5 percent. The other suggestion under consideration is to levy a quota of 32,000 – 40,000 tons per month.

Fibre2Fashion News Desk - India

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