CAI demands removal of ban on cotton exports

Mumbai: The Cotton Association of India (CAI) has urged the Prime Minister Manmohan Singh to free the cotton exports immediately saying that the move will benefit the farmers the most, as a sizeable quantity of cotton is still in the their hands and is yet to arrive in the market.

Last month, the government had banned the cotton exports and lifted the ban within a week. But new registration for the cotton exports has not been allowed yet.

Due to the fall in the prices as a result of this ban, the farmers are losing heavily. It is over a one month since the export of further quantities of cotton has not been allowed, the CAI said in a statement here.

Though Indian mills had the option of entering the market, they have not done so in a big way, despite the cotton prices being lower than before, thereby giving no support to the cotton prices, Cotton Association of India President Dhiren N Sheth said.

In case of need later on in the season, the spinning mills have the option of importing duty free cotton. It has happened in the past not several years ago, when almost 15 per cent of the total cotton production of the country was imported by the mills for several years in succession, Sheth said.

It is extremely unlikely that even half of such an import figure will be required to be reached this season. Australian, Brazilian and East African cotton is expected to be available in abundance, he added.

Even during the years when India was a net cotton deficit country, cotton exports were always kept under Open General Licence (OGL). However, it is ironical that in the years of surplus availability of cotton, export is meted out with restrictive policies now.

Despite being a net cotton deficit economy, our neighbouring county Pakistan always follows the practice of maintaining free exports of cotton to ensure optimum return to the farmers and there is no logic why India, which is a surplus cotton economy now, cannot follow suit, he said.

It is in everybody`s interest that the ban on cotton export is removed without any further loss of time and we urge the Government to open registration of further quantities for export and make the export of cotton free under OGL without any quantitative and other restrictions with immediate effect, Sheth added.