The Hindu Business Line : SIMA seeks immediate ban on cotton exports

Coimbatore, Nov. 3 With many cotton-growing States hit by either drought or floods, affecting cotton yield or quality of crop and the prices hardening instead of softening even after the start of the new season, the Southern India Mills Association (SIMA) has appealed to the Centre to ban cotton exports forthwith.

The association fears that the cotton yield this year might be 10 per cent less than last year’s and even of this, only about 60 per cent would be of good quality meeting industry requirements, creating pricing pressure.

Mr J. Thulasidharan, Chairman, SIMA, Coimbatore, the umbrella organisation of the textile mills in the South, in a statement said the industry has not been able to compete with the traders who are buying a significant portion of good quality cotton for exports.

Price rise

He said cotton prices usually fall by at least Rs 1,000 to Rs 1,500 a candy (356 kg) during October-November compared with September. During the current season, prices have spiralled by around Rs 2,000/candy compared with September prices and the price for standard varieties such as Shankar-6 has already crossed Rs 25,000/candy against Rs 22,600 in September.

He demanded that the Union Government should immediately ban cotton export and stop registering any cotton for export purpose in view of the ‘grave situation’.

Failure of monsoon in some States and floods in a few other cotton growing States have hit the crop yield and he estimated that the actual production might be only around 260 lakh bales as against 290 lakh bales produced during last year. Of this, only around 150-160 lakh bales would be of good and above average quality cotton.

Mr Thulasidharan feared that if quality cotton is permitted to be exported, the domestic mills, which need around 240 lakh bales, would be saddled with ‘substandard and inferior quality cotton’.

Also, they would be ‘compelled to pay the price of good quality cotton’ for the ‘substandard’ one and would have to look to imports for their requirements.

He said the industry has been pleading with the Central Government to provide working capital at a competitive cost to have a level playing field with the traders.

Multinational cotton traders have been able to source funds at 3- 4 per cent interest but the Government is yet to decide on it.

More than 18 lakh bales of new crop have been cornered by a few large traders for export that led to skyrocketing of domestic cotton prices in a week’s time.

The SIMA Chairman said every one lakh cotton bale would provide employment to 60,000 people.

Hence, all good and above average quality cotton should be converted to finished goods and exported which would increase the foreign exchange earnings.

More Stories on : Textiles | Cotton | Tamil Nadu

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page