The spinning industry is up in arms against the government’s decision to curb export of cotton yarn beyond 720 million kg this financial year. Spinners contend that it would have to resort to distress sale in the domestic market.

The total cotton yarn production in India is estimated at 3,460 million kg while domestic demand is pegged at 2,650 million kg during 2010-11.

“It has been decided that only 21 per cent of the total production will be exported and the rest will be sold in domestic market. Hence, there will be no further registration of cotton yarn exports beyond 720 million kg. No export applications will be received beyond this limit,” textiles minister Dayanidhi Maran said.

The spinning industry is crying foul over this decision. “The centre has put us in a very difficult situation. On one hand, they are allowing export of raw cotton leading to a spurt in cotton prices in the domestic market. Now, with restriction on export of cotton yarn, there is a possibility that the spinning industry will close down as they will have to sell their produce at lower rates in the domestic market,” Sushil Patwari, managing director of Kolkata-based Nagreeka Exports, said.

Earlier, the government had placed a ceiling of 55 lakh bales (170 kg each) on raw cotton exports in the current crop year that runs from October 2010 to September 2011.

The move has come as a relief to the domestic textile industry. For long, the textiles industry has been clamouring for imposing restrictions on exports of cotton and cotton yarn, arguing that high prices are making their operations unviable.

source:mydigitalfc