Suspend cotton exports, cap yarn exports: Karunanidi

CHENNAI - Citing the upward trend in cotton and yarn prices, Tamil Nadu Chief Minister M. Karunanidhi Thursday urged Prime Minister Manmohan Singh to suspend cotton exports and cap cotton yarn exports as well as levy an export duty on it with immediate effect.

In a letter to Manmohan Singh, a copy of which was released to the media, Karunanidhi - referring to the central government’s permission to export 55 lakh bales from November onwards - said: “Between last week of September 2010 and the last week of November 2010, cotton prices have increased almost by 20 percent. Further hectic buying indulged in by the exporters of cotton has resulted in arrivals to the market being woefully inadequate to meet the domestic consumption.”

“Normally the period of 4-5 months after October witness a dip in cotton prices owing to fresh arrivals in the market. However, this year, the clearance given for exporting 55 lakh bales of cotton has resulted in a hand to mouth situation by which virtually no cotton is available in the market to build up cotton stocks,” he said.

According to him, competing countries like China maintain a stock to use ratio of about 33 percent as against India’s 17 percent.

Referring to the rise in cotton yarn prices due to increase in cotton exports, Karunanidhi has said yarn exports should be moderated so that value addition is possible downstream, “…so as to enable higher production of powerloom cloth, knitwear, handloom cloth, garments etc.”

–Indo Asian News Service