Slamming the government's 'premature' announcement of the opening of cotton exports for the coming cotton season, the textile industry has urged the centre not to go ahead with the registration of contracts for the export of the raw material till next January.
In a joint letter to the prime minister Manmohan Singh and other senior cabinet ministers, leaders of the industry contend that the government's announcement of removal of cotton exports from the restricted list had led to a steep hike in cotton prices to the tune of around Rs6,000 a candy, within a few weeks.
Addressing a press conference in New Delhi yesterday, the leaders led by chairman of the Confederation of Indian Textile Industry Shishir Jaipuria, said the hike has dealt a severe blow to the industry coming as it does on the top of the growing shortage of the commodity due to exports of over 83 lakh bales during the current (2009-10) cotton season.
''Shankar-6, which is the standard cotton, is being sold at Rs40,000 a candy as against Rs23,000 a candy at the beginning of the season. But, even at this price cotton is scarcely available,'' they said. According to the industry the situation warranted a bar on registration of contracts for exports of cotton till January to ensure that the best cotton was available to the domestic industry.
Similarly, in order to ensure that stocks were not transferred among traders and to prevent hoarding, cotton exports needed to be brought under the restricted list and only contracts for exports to actual users needed to be registered.
Further export duty needed to be increased to Rs10,000 a tonne, and 1.5 per cent export incentive given to cotton exporters needed to be withdrawn.
Also given that the global demand for cotton was expected to rise in the coming months on production shortfall in China and Pakistan, they said the first charge on cotton produced in the country should be that of the domestic industry and not that of China and other competing countries.
Apart from Jaipuria, the signatories to the letter include leaders of the Apparel Export Promotion Council, the Cotton Textiles Export Promotion Council, the Indian Spinners Association, the Federation of Indian Exporters' Association and the Handloom Export Promotion Council.
Meanwhile an informal meeting of senior ministers including finance minister Pranab Mukherjee and agriculture minister Sharad Pawar, has been called tomorrow to review crop outlook for the next season. According to agency reports ministers of textile and commerce are also likely to attend the meeting.