The Confederation of Indian Textile Industry (CITI) has said the government must suspend further registration of cotton exports. Substantial quantities above the exportable surplus have already been shipped and unrestricted exports of cotton would create a serious cotton shortage in the last few months of the current cotton year ending September 2012, CITI said on Tuesday. The Centre on April 30 lifted the ban on cotton exports.
CITI chairman SV Arumugam in a statement on Tuesday appealed to the Prime Minister, finance minister and textile minister to review this decision and avoid large exports of Indian cotton to the competing countries.
He said the confederation had briefed the Centre that India does not have any exportable surplus and therefore no further shipments may be permitted from the current year’s crop. “As per government’s Cotton Advisory Board (CAB), the closing stock of cotton for the year would be 25 lakh bales as against 50 lakh bales earlier stipulated by the group of ministers as minimum closing stock required. He added that CAB had earlier identified the exportable surplus at 84 lakh bales, but exports of 115 lakh bales had already been allowed by the government before taking the present decision on allowing unrestricted exports,” he said.
Even as the domestic industry recovers from recent cotton fluctuations, exporting large quantities would leave the industry at the mercy of traders for obtaining cotton from global markets during at least two months of the cotton year (August & September 2012). Rupee depreciation has already made cotton exports lucrative. With further erosion expected in rupee value, the situation would be precarious.