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Indian spinning industry body pleads to curb further cotton exports
Apr '11
The Southern India Mills' Association (SIMA) has urged the Prime Minister of India not to allow any further export of raw cotton till January 2012.

In response to the media report that the Indian Agriculture Ministry has recommended to enhance the export quota of raw cotton by 1.5 million bales to reach a ceiling of 7 million bales (170 kg each) for this cotton season ending in September 2011, the chairman of SIMA, Mr. J. Thulasidharan on April 6th, has written to Mr. Manmohan Singh, the Prime Minister of India and the Cabinet Ministers of Finance, Commerce & Trade and Textiles urging them not to allow any further cotton exports from India.

In speaking to this scribe on April 6th from India Dr. K Selvaraju, Secretary General of SIMA told that the spinning industry will face a shortage of 2 million bales of cotton (170 kg each) during the tail end of this cotton season even with the current export limit. He added that the SIMA has urged the Indian government to curb further cotton exports due to the supply shortfall and the interest from the Indian Ministry of Agriculture to enhance the export ceiling limit.

In the letter to the Prime Minister, Mr. Thulasidharan has forecast the shortage of cotton from July of this season and insisted that there needs to be a closing stock of at least 5.5 million bales (170 kg each) for this season. However, on February 25th, India's Cotton Advisory Board has estimated the closing stock for this season to be 2.75 million bales (170 kg each).

Mr. Thulasidharan has stated that allowing further export of cotton will result in the closure of large number of spinning mills between July and October. He has commented that any further cotton export will be disastrous for the spinning industry which is already suffering due to enormous inventory of cotton yarns and poor upstream demand.

A cotton procurement executive from a textile conglomerate who wants to remain anonymous said to this scribe that the enhancement of the export level may be a bonus for this year; but he feels this situation is highly unlikely as the cotton arrivals in India are in the last throw. Producers are likely to bring 5th or 6th picking to the market limiting the availability and the planting season in the State of Punjab is on the horizon. He ruled out that the export enhancement is merely a speculation at this juncture.

Seshadri Ramkumar, Texas Tech University

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