INDIA: Apparel exporters call for new controls on cotton.

Indian apparel exporters have warned that rising cotton and yarn prices will “cripple” the industry unless new controls are imposed on the export of raw cotton.

Their concerns come as the government prepares for the 1 October lifting of current restrictions that only allow exports under licence from India's directorate general of foreign trade. After this date, contracts to export cotton just need to be registered with the Textile Commissioner prior to shipment.

“Yarn mills have once again stopped deliveries and are talking about minimum INR10 (US$0.21) per kg price increases for September delivery,” said Premal Udani, chairman of the Apparel Export Promotion Council (AEPC) in a letter sent to textile minister Dayanidhi Maran.

He is urging the government to ensure that exports of cotton and yarn are calibrated and do not cause market disruption to producers of garments for export and domestic markets.

The sharp rise in price is blamed on the government's decision to allow cotton exports again, and the unexpected loss of cotton crops due to floods in Pakistan.

“Our country has a unique opportunity to maximise garment exports due to various problems in the neighbouring countries,” Udani said.

“However, if raw materials are allowed to be freely exported and consequently there are hefty price increases as well as shortages in the domestic market, it will cripple our industry.”

The government in April announced it was banning exports of raw cotton that had not already been registered, in an attempt to halt soaring price hikes and exports.

Source : just-style.com