Indian textile companies demand restrictions on cotton exports
Indian domestic textile companies have expressed concern about the continuous expansion of cotton exports, which has led to high domestic cotton prices. They said that if cotton exports are not regulated, the profit rate of textile companies will be reduced by 5-10%. In the 2007-08 (August-July) cotton year, India is expected to export 8.5 million bales of cotton (170 kilograms per bale), an increase of 30% from the initial estimate of 6.5 million bales. China is the main buyer, and more than 60% of India's total cotton production is exported to China. According to the latest estimate of the Cotton Information Committee, this year’s cotton production is 31.5 million bales, of which exports constitute 27% of the cotton production (a 6% increase from last year). However, the latest estimates by the International Cotton Information Committee show that India’s exports in 2008-09 will reach 9.6 million bales. A head of a textile factory said that domestic companies are facing the dilemma of high cotton prices. Especially spinning companies will be the first victims. If cotton prices cannot cool down, the profits of textile companies will eventually fall by 5-10%. The current price of Shankar-6 cotton is 24,500 rupees/candy (1 candyu003d356 kg), while the price in the same period last year was about 20,000 rupees/candy. According to industry insiders, by the end of the month or by June, the price may rise to 25,000 rupees/candy. The textile industry requires the government to restrict cotton exports to curb price increases. Due to the appreciation of the rupee, the textile industry, which was worth over 45 billion U.S. dollars last year, fell into a difficult period. In fiscal year 2008, the textile industry was unable to reach its export target of 25 billion U.S. dollars and finally completed 20.5 billion U.S. dollars, which is 18% behind the target.