The Union government may impose a temporary ban on cotton exports if cotton prices continue to surge, according to textiles secretary Upendra Prasad Singh.
The Union government may impose a temporary ban on cotton exports if cotton prices continue to surge, according to textiles secretary Upendra Prasad Singh.
The statement comes at a time when the Indian textile Industry is reeling under a spike in cotton and yarn prices, impacting production and exports. Cotton prices have doubled in barely a year to over Rs 90,000 per candy. Prices of some varieties of cotton have even touched RS 100,000 per candy. A ban could free up cotton for the domestic market and thus help soften prices.
High cotton prices affect the Indian textile industry disproportionately, as it is heavily dependent on cotton. Singh said cotton prices are unlikely to decline before October when the new cotton crops arrive. Cotton prices have been a “dampener” and the problem could persist for some time as there is a global shortage of cotton, Singh said.
The statement comes a week after the government waived customs duties on imported cotton until September. Earlier, cotton imports were effectively taxed at 11%. The price surge can be traced back to the US ban on the import of cotton products from China’s Xinjiang region. Textile manufacturers said many of them have had to cut production because of rising input costs. While customers have borne rising prices “to a certain point”, garment manufacturers apprehend resistance going forward.
Source: mint
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