CITI welcomes postponement of cotton exports
Confederation of Indian Textile Industry (CITI) welcomed the decision of government to defer export of cotton from the new crop by a month to 1st November 2010.
In a statement here Shri Shishir Jaipuria, Chairman, CITI also welcomed the reiteration that exports would be restricted to the exportable surplus of 55 lakh bales. He thanked the Minister of Textiles, Thiru Dayanidhi Maran for resisting the attempts of cotton traders and the Agriculture Ministry to overestimate exportable surplus and to commence exports immediately.
Shri Jaipuria pointed out that the estimates of global crop are gradually coming down with the unraveling of the problems that cotton production has faced this year in Pakistan and China. He stated that similar uncertainties are there in India's crop because of excessive rains in certain areas and therefore the approach to cotton exports should be cautious, especially until firm crop estimates and a clearer picture of the significantly increasing cotton consumption in the country are available.
In this context, CITI Chairman stated that 1st November will be too early to permit cotton exports and they should be deferred up to 1st January 2011 by which time a clearer picture of the cotton scenario of the season would be available. He stated that the industry is prepared to pay international cotton prices to Indian farmers and exports should be restricted to the quantity for which the industry was not able to offer international prices to Indian farmers. Shri Jaipuria added that the interests of farmers are of primary importance and the industry only wanted to curtail speculation in the domestic market.
He pointed out that the announcement of exports from 1st November has already resulted in an increase of more than Rs.500 a candy in cotton prices in the country and this is a reflection of the market sentiments. “Currently cotton prices in India are significantly higher than international prices and the situation will only worsen in the coming months unless a firm announcement is made that exports would be monitored closely and restricted to exportable surplus”, he said.
He observed that the decision to review cotton export norms by mid October and the feelers from the Agriculture Ministry that exportable surplus would be higher than the present estimate of 55 lakh bales have created confusion and uncertainties in the market and these have contributed to the immediate increase in cotton prices.
Shri Jaipuria pointed out that countries like China, Pakistan and Bangladesh are hungry for cotton at present and their governments were going out of their way to procure Indian cotton and supply it to their mills at lower prices through visible and invisible internal subsidies.
“Unless our government takes effective steps to ensure cotton security for Indian mills by providing affordable access to our own cotton, without hasty exports, the textile value chain of the country from yarn to garments and made ups and the over 35 million workers employed by them will be hit irreparably”, stated Shri Shishir Jaipuria.
Confederation of Indian Textile Industry (CITI)