Textiles Ministry
Justifies Cotton Export Ban, Says Stocks Low even as Low Prices Force Cotton Corporation
to Buy in Quiet Market
The DGFT has notified prohibition on export of cotton on March 5, 2012
till further orders with immediate effect. 94.75 lac bales have been exported
till March 4, 2012.
2. India’s cotton exports reached
91 lac bales in February 2012 with over 120 lac bales of cotton registered for
exports. Cotton arrivals in the market as of March 6, 2012 have reached 245 lac
bales against a crop size of 340 lac bales. Registration for
cotton export have been about 50% of cotton arrivals. Currently Textiles
mills are carrying their lowest ever stocks in the past decade. Given the tight
liquidity position in the industry, it is not possible for them to procure larger
quantities to cover their future requirements at this stage.
3. With only 25 percent of cotton
to arrive in the markets, and nearly 7 months of the cotton season ahead, the
scenario ahead pointed to a shortage of cotton for the domestic industry, huge
rise in domestic price of cotton and inability of textiles mills to build up
carryover stocks for the cotton year 2012-13.
4. The Textiles Policy strives to
balance competing interests of the value chain. The informal Group of Ministers
had in April 2010 therefore laid down that a carry forward balance of 50 lac
bales should be maintained and only surplus cotton stock should be exported. Exports at 94 lac bales has brought down carry over stock
for next season to 36 lac bales. Even with reduced carryover the availability
for consumption is down to 230 lac bales equivalent to 19 lac bales a month
against an installed capacity of 23 lac bales.
5. Cotton Corporation of India has
been advised to protect farmer’s interests by procurements in all mandis of India where the prices fall below MSP prices.
Textiles Mills have also commenced procurement operations across the country.
The price situation is unlikely to be adversely affected by the current
decision for long.
Comparison
of Cotton Supply and Demand 2010-11 and 2011-12 – CAB Forecasts and Actuals
In Lac Bales of 170 kgs each
|
CAB Actuals 2010-11 |
CAB forecast 2011-12 |
Revised on basis of Trends till March 2012 |
|
|
SUPPLY |
|||
|
Opening Stock |
40.50 |
48.30 |
32.59 |
|
Crop |
339.00 |
345.00 |
340.00 |
|
Imports |
5.00 |
6.00 |
8.00 |
|
Total Supply |
384.50 |
399.30 |
380.59 |
|
DEMAND |
|||
|
Mill/ SSI Consumption |
245.91 |
240 |
230.00 |
|
Non Mill Consumption |
26 |
240 |
20 |
|
Exports |
80 |
84 |
94 |
|
Total Offtake |
351.91 |
344.00 |
344.00 |
|
Carry over Stock |
32.59 |
55.30 |
36.59 |
[Source:
Ministry of Textiles, PIB Press Release dated 6th March 2012]