The Hindu : Tamil Nadu News : PM's intervention sought to control cotton prices

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Monday, Sep 13, 2010
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Tamil Nadu

Tamil Nadu

PM's intervention sought to control cotton prices

Staff Reporter

12 textile associations have come together to send a joint representation
It highlights the trail of cotton price hikes which took place at almost on a daily basis

Tirupur: As many as 12 textile associations here came together to send a joint representation to Prime Minister Manmohan Singh on Saturday seeking his intervention to control the rising prices of cotton, which is the major raw material for the knitwear products coming out of the Tirupur cluster.

The memorandum, signed by associations like South India Hosiery Manufacturers Association, Tirupur Industrial Federation, Knit Cloth Manufacturers Association, Tirupur Exporters Association and Tirupur Export Knit Printers Association, among others, had highlighted the trail of cotton price hikes which took place at almost on a daily basis following the recent decision to remove the restrictions on cotton exports.

Though the notification issued by Directorate General of Foreign Trade on August 17 stated that the cotton export would be brought under the Open General License (OGL) from October 1, the advance announcement triggered the cotton prices to new highs owing to the commencement of speculative trade.

Substantiating the point, the associations had cited in their representation that the price of Shankar-6 variety, predominantly used for manufacturing knitwear garments, scaled from Rs. 30,800 per candy on August 16 to touch Rs. 39,000 per candy on September 8.

This periodic price rise continued even after the government put caps on cotton exports at 55 lakh bales.

Control exports

The associations wanted the Central Government to bring cotton under the Essential Commodities Act so that its exports could be controlled effectively.

Likewise, the cotton exports should be permitted only from January 1, 2011, after assessing the exact quantity of cotton arrivals for the ‘cotton season' beginning October 1. This step, according to the associations, will also help prevent the best quality of cotton from getting exported.

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