Govt decision to control cotton yarn exports flayed .

Cotton yarn spinners and exporters have come down heavily on the Government's decision to control the export of cotton yarn by announcing registration of cotton yarn exports with immediate effect and imposition of prohibitive duty on export of the same.

Expressing shock over “this hasty decision and step-motherly attitude” by the Government, the Northern India Textile Mills Association (NITMA) President Mr Ashish Bagrodia said the price of the cotton yarn had risen because of an abnormal increase in raw cotton prices.

“The raw cotton price has increased from Rs 23,000 to Rs 29,000/ candy in past three months and has remained higher than the minimum support price this season. The labour cost has almost tripled during the past three years and the industry is facing severe power shortage affecting production costs and availability,” Mr Bagrodia said in a release.

It is learnt that a number of mills had approached banks and institutions for financial restructuring of debts after incurring heavy cash losses of 8-10 per cent on turnover, courtesy the global economic crisis. The present move, Mr Bagrodia said, “would dent the country's image as foreign buyers would look upon us as unreliable suppliers and it is bound to have an adverse impact our global market share.” He conceded there was a global shortage of cotton yarn and fabrics.

“The ideal policy would have been in allowing spinning and cotton farming to remain profitable and help create the necessary capacities to remove supply-side constraints,” Mr Bagrodaia said.

Source : Business Line