Indian Cotton Merchants Demand Free Export
Dhiren Sheth, Cotton Association of India president, is urging Dr. Manmohan Singh, Prime Minister of India, to take immediate steps to allow free cotton exports.
May 26, 2011
The Cotton Association of India (CAI) has urged the country’s Prime Minister to allow free cotton exports from India, effective immediately. On May 19, Dhiren Sheth, CAI president, sent a four-page letter to Dr. Manmohan Singh, Prime Minister of India, urging him to take immediate steps to allow free cotton exports from India under Open General License, without any quantitative restrictions.
In his letter, Sheth has made it clear that the curbing of cotton exports since the end of February has resulted in a cotton price crash of as much as 30 percent. The plight of the farmers has been exacerbated because Indian cotton farmers are not able to realize the much-higher global prices. The letter criticized India’s export policy, which has been vacillating since April 2010, leading to an erosion of the international market’s confidence in Indian cotton.
Sheth said that the restriction of cotton exports is disastrous to Indian farmers, who are left to the mercy of Indian textile mills and has urged the government to allow free export trade, without any quantitative restrictions, without delay.
Kishore Tiwari, president of farmer support group Vidarbha Jan Andolan Samiti, has strongly backed the CAI’s plea for free cotton trade and has criticized the Indian textile lobby for blocking free exports from India.
The spinning industry is suffering, too
Unfortunately, the hard times in India are being felt not only by the growers, but by spinners as well. Unless the situation changes, the Indian spinning sector is set to incur huge losses of about $164 million.
The spinning sector’s one-day strike on May 23 resulted in a loss of $45 million alone. In addition, the planned production reduction for the next week is expected result in the loss of $17 million per day, or $119 million over seven days.
D. K. Nair, secretary general of the Confederation of Indian Textile Industry (CITI), provided the economic loss figures and announced that CITI will appraise the situation during the first week in June before taking any further action.
Shirshir Jaipuria, chairman of CITI, said that the one-day spinning sector strike was observed throughout India. It was led by CITI and all major spinning associations in the country participated to highlight the current crisis situation resulting from the government’s restrictions imposed on cotton yarn exports. Those restrictions were withdrawn effective April 1st, 2011.