TEA advises curbs on cotton exports
The Central Government has decided to put a cap on cotton exports at 55 lakh bales for 2010-11 effective from 1st October 2010 and also added that the policy would be reviewed on 15th November 2010. It has also been mentioned that a prohibitive export duty will be imposed once the cotton exports touched the ceiling fixed at 55 lakh bales.
In a press release issued, Shri.A. Sakthivel, President of Tirupur Exporters' Association (TEA) mentioned that he has sent a representation to Shri. Anand Sharma, Hon'ble Union Minister for Commerce and Industry requesting him to put some regulation on cotton exports fixed at 55 lakh bales so that good quality cotton will not go out of country in the initial days itself.
We would like to drive home the point that it is essential to put a regulation on cotton exports in the initial stage itself so that the arrival of good quality of cotton in the beginning of the cotton season to the market will not go out of our Country at a stroke and give beneficial to our competing Countries in the knitwear items in the global market.
The quality is a paramount importance for a knitwear garments at this point of hour to sustain in the global market. Moreover, the factor will also help to increase our competitiveness and thereby, we could edge over our competitors in the global market. The striking features of our quality products would naturally attract more buyers and they will pay their attention to our country for sourcing the quality products.
We wish to point out that the Government should support for export of value added items, after protecting the interest of the cotton growers. If one Kg. of cotton is exported, it may fetch on an average Rs.85/- per Kg. whereas the knitwear garments produced out of one Kg. of cotton fetches on an average Rs.750/-, and the value addition is about 8 to 10 times more than the cotton exports.
Apart from this, in total, including each stages of processing of one Kg of cotton, the job creation is about six to seven jobs, and our apprehension is that if cotton is exported in the initial stage of arrival of new cotton crops itself, then due to negative impact on the textile industry, the job losses will be observed in large number.
Our another requisition is that the cap of cotton exports at 55 lakh bales during 2010-11 should be kept at the same level and maintained as a final figure for this year and no more permission has to be given for exporting above 55 lakh bales.
We have an apprehension that cotton exporters may try to register more quantity of cotton exports once the cotton registration starts from 15th September 2010 and will trigger for skyrocketing of cotton prices in the domestic market. We always endorse the view that the cotton producing farmers should reap the benefit out of the price rise and not the traders and MNC Companies.
To resist the bulk shipments of good quality cotton at a stroke in the initial days itself and also to control the increasing of cotton prices due to speculation and hoarding, we request the Hon'ble Minister to kindly put a regulation on cotton exports out of the 55 lakh bales earmarked for this year exports, mainly for the benefit of entire textile industry and lakhs and lakhs of people employed with the industry.
Tirupur Exporters' Association