Mills Urge Govt To Delay Cotton Exports To Jan 1.

COIMBATORE: Garment makers and spinning mills - the worst hit by steep rise in cotton prices early this year - have urged the Centre to delay cotton exports this season to January 1. The cotton season starts in October.

The demand comes after the government's decision to lift restrictions on cotton exports under the open general licence (OGL), on Sunday.

"As the cotton season and new crop arrival commences only from October, the decision on permitting exports during the beginning of the season under OGL will create speculation," said A Sakthivel , president, Tirupur Exporters' Association (TEA).

The Centre's move is aimed at generating remunerative prices for farmers in line with the global market.
The textile industry, however , is worried. "The announcement on permitting cotton exports last year from October had caused damage to the whole textile industry," said Sakthivel.

After the director general of foreign trade issued a notification on August 17 last year permitting exports, cotton prices went up sharply and started increasing almost on a daily basis, he said.

Moreover, quality cotton will be exported to competing countries depriving the domestic textile industry of good raw material, he said in a letter to commerce minister Anand Sharma. In order to avoid a repeat of last season's situation, Sakthivel said, exports should be calibrated and only exportable surplus available after meeting the requirement of the domestic textile industry should be permitted from January 2012.

"The surplus cotton projected by the Cotton Advisory Board could be allowed under OGL with effect from January 1 to avoid artificial scarcity during the beginning of the season," said J Thulasidharan , chairman, Southern India Mills' Association (SIMA ).

"The Cotton Corporation of India (CCI) and NAFED should give preference only to the actual consumers and not to traders to avoid speculation," Thulasidharan said. The CCI should hold 10 lakh bales (a bale is 170 kg) as buffer stock to feed the small and medium spinning mills throughout the season since they are not in a position to store more than two months' stock, he said.

Source : timesofindia.indiatimes.com