The Union government may regulate the export of cotton to help the textile mills in the country. An indication to this effect was given by Union minister of state for textiles EVK S Elangovan in Madurai on Monday.
He said that the government was planning “to impose restrictions on export of cotton to help Indian weavers get sufficient quantity and to boost exports of value-added cotton goods.” The government was worried that the textile sector has been hit hard, despite increase in cotton production, he said.
The minister said that the government was aware that weavers had been affected by the steep increase in cotton prices and non-availability of cotton due to uncontrolled exports.
Organisations like the Coimbatore-based Southern India Mills Association (SIMA) and the South India Small Spinners Association (SISSPA) have been making fervent pleas to the government to ban export of cotton to control soaring prices and make cotton available to the spinning mills. Though Tamil Nadu produces almost 60% of the yarn in the country, cotton production in the state is only a fraction of the demand. Tamil Nadu mills buy cotton from centres in Gujarat, Punjab and Haryana.
They are forced to compete with the buyers from Pakistan, China and Thailand, who have offices and godowns here. Market sources say the foreign buyers are holding huge stocks of over 1.2 million bales of cotton leading to speculative price trends. Even the December 2008 prices are quoted at around Rs 23,000 a quintal. “The free market for cotton export may force the Indian mills to buy from foreign traders operating in the country,” they said. Mills in Tamil Nadu have welcomed the minister’s statement that the Centre was planning to curb cotton exports.