In order to provide adequate amount of raw cotton to the domestic industry, the government has imposed ban on the export of cotton from 19th of April. But, this ban has been imposed when the cotton season is about to finish and quality cotton has already been exported to the countries like Pakistan, Bangladesh and China, and just the end-of-season cotton has been left behind.
The industry had been urging government to control raw cotton sales since the month of October. Demand for raw cotton in domestic as well as in global market showed increase with global economic recovery. This demand escalation resulted into the constant growth of prices of cotton.
Though these prices have now started falling down, the industrialists are still skeptical about their move in coming days. India's raw cotton production for the year 2009-2010 is projected at 29.2 million bales (1 bale=170 kg), slightly more than 29 million bales produced in 2008-09.
Domestic consumption of cotton grew by 9.17 percent, while its exports soared up by 128.6 percent during this fiscal. Considering all these factors, as per the Cotton Advisory Board, in 2009-2010 around 4 million bales will remain in the stock, which is less by 3.15 million bales than that in 2008-09. As per experts, the season ending stock should be at least 5.5 to 6 million bales, to fulfill at least three-month requirement of the domestic industry.
Currently, not even 10 per cent of the end-of-season raw material is suitable to manufacture high-quality fabrics. Now, industry experts say that the textile sector will need to import raw cotton at a price higher than that at which the exporters exported it, as the domestic market would witness raw cotton dearth due to the export of best produce.
Fibre2fashion News Desk - India
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