Hyderabad Nov. 16 The Textile Ministry will be putting before the Cabinet a note seeking a temporary ban on cotton export to ensure adequate availability of the raw material to the domestic spinning mills industry.
This assurance was given by the Union Minister for Textiles, Mr Dayanidi Maran, to a delegation of the Southern India Mills Association during a meeting in New Delhi a few days ago.
Output fears
The domestic spinning mills industry has been seeking a temporary ban on cotton exports as it fears that lower cotton production may deprive the domestic industry of raw material supplies, at a time when export and domestic orders were picking up in the wake of an easing of recessionary pressures and global yarn prices were on the rise.
“The Minister was very positive to our plea. The Government could always revive exports if we are left with surplus production at the end of the season,” Mr. R.K. Agarwal, SIMA Member and Managing Director of Suryavanshi Spinning Mills, said.
The Cotton Advisory Board, a few days ago, had projected a drop in cotton production from the earlier estimates of 305 lakh bales (of 170 kg each) to 295 lakh bales.
Pegged at 260 lakh bales
But SIMA feels that even this could be on the higher side. “We expect the production to finally be about 260 lakh bales, against our earlier projection of 290 lakh bales due to adverse climatic conditions in some of the producing States. At 260 lakh bales production, it will be just about adequate to meet the local demand,” Mr. Agarwal said.
Industry sources say that in the light of the global shortage of cotton, there was pressure from domestic cotton traders to divert the local supplies to the export markets. The current global shortage of cotton is estimated to be about 1.5 million tonnes.
The sources say that that out of the 18.5 lakh bales that arrived in the market recently, 10.5 lakh bales has already been registered for export with the Textile Commissioner. This, they say, has created a shortage in the domestic market, despite the fact that there was a sizeable carry over stock of 72 lakh bales during the end of the last season. The shortage has also pushed up cotton prices to over Rs 2,000 per candy, despite the carry over stock.
“If production surpasses our projections of 260 lakh bales and we are left with a surplus by February 2010, the Government may revive exports. This way the domestic industry, which has gone through a severe crisis in the last two years, could make use of the demand pick up in the global markets,” Mr. Sushil Sancheti, Deputy Chairman of AP Spinning Mills Association, said.
Source : Business Line