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India's ban on cotton exports evokes mixed response

Mar '12
The decision of Government of India to ban exports of cotton has received mixed response from various textile and garment bodies.

The Indian Government prohibited the exports of cotton till further notice due to apprehensions that there might be shortage of cotton in the domestic market as there are fears of hoarding in warehouses in India's export markets.

The Confederation of Indian Textile Industry (CITI) said the ban imposed by the Government on exports of natural fibre has come as a surprise to it.

CITI Secretary General DK Nair said there is enough supply of cotton to meet the current requirement as there is a slowdown in demand for cotton in both local and international markets.

On the other hand, the Government's move to ban exports of cotton was welcomed by Apparel Export Promotion Council (AEPC).

AEPC Chairman A Sakhtivel said the ban will help in promoting exports of value-added items like garments, which give higher returns compared to exports of raw material like cotton.

He added that the Government's move would ensure adequate supply of raw material to textile mills and thus boost apparel exports in future.

He said the ban would also enable India to compete with countries like Bangladesh in garment exports.

The Triupr Exporters' Association (TEA) has also welcomed the decision of the Ministry of Commerce to ban export of cotton.

TEA termed the Government's decision as a positive step that would help in revival of the textile industry, where cotton is the main raw material.

It added that the cotton export ban will reduce cotton price distortions in the local market and a hoped that a correction in cotton price will soon take place.

Meanwhile, Agriculture Minister Sharad Pawar has strongly objected to the Government's decision saying the cotton cultivators in Gujarat, Madhya Pradesh and Andhra Pradesh are greatly affected as traders in these States have stopped purchasing cotton from them after the ban on exports was announced.

The Minister has written to Prime Minister Manmohan Singh seeking his intervention in the matter and demanded lifting of the ban on cotton exports with immediate effect.

As per the estimates of the Agriculture Ministry, India's cotton production during the current season (October 2011-September 2012) is likely to be around 34 million bales of 170 kg, revised downwards from the earlier projection of 34.5 million bales.

Till February 2012, India exported 9.1 million bales, compared to estimates of exports of 8.4 million bales during the entire season, according to the data from the Ministry of Textiles.

Fibre2fashion News Desk - India

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