Govt suspends cotton yarn registration

COIMBATORE/AHMEDABAD: The Centre has suspended registration of cotton yarn after capping exports at 7.2 lakh tonne on Tuesday, triggering mixed reactions from the textile industry.

With Shankar-6 costing Rs 44,000 per candy (of 356 kg each) against Rs 29,000 per candy same time last year, cotton yarn (40 count) had gone up to Rs 250 per kg against Rs 150 kg a year ago.

Tirupur Exporters Association president A Sakthivel said that the ban on cotton yarn exports would bring down prices of cotton yarn and availability of yarn in domestic market and would ease pressures in the downstream players comprising garmenters, handloom-powerloom weavers and madeups.

While the domestic consumers of cotton yarn, the knitwear manufacturers, have welcomed the suspension of cotton yarn exports registration, the spinners have termed it as a bad move.

“It will send wrong signals to the international market,” said an industry expert. The industry has been exporting 19% to 21% of cotton yarn produced in the country for the past 15 years as the domestic consuming industry has no capacity to absorb this 20% of production, said GTN Textiles chairman BK Patodia. “We make enough yarn for the domestic end-users. This sudden stopping of export registration will upset the entire value chain. It will affect the price of yarn as well as raw cotton,” he added.

According to him, the government should have waited for shipment figures. According to Office of Textile Commissioner, Mumbai, only 4.57 lakh tonne of cotton yarn have been shipped from the country. “Even if another 3 lakh tonne gets exported in the next three months, it wouldn’t be more than 7.5 lakh tonne. But this stopping of export registration will affect the continuity of business,” Mr Patodia added.