The textile Industry has welcomed the Government's decision to ban further export of cotton to plug speculative registration of cotton export contracts.
Mr S.V. Arumugam, Chairman, Confederation of Indian Textile Industry, said though the confederation had earlier reacted against Government intervention in the cotton market and suggested that market forces be allowed to play out, “it has now come to our notice that speculative registration of cotton export contracts in large quantities has been resorted to by some traders and permitting exports against such contracts would have seriously affected the fibre security of the textile value chain.”
Mr T. Kannan, Chairman, National Textile Committee, Confederation of Indian Industry, said though he held the view that the Government must not interfere with the market mechanism, when there is “unusual rigging” of trade registrations and stocking abroad, the Government has no choice but to intervene.
Cotton export contracts
Mr Arumugam pointed out the industry has been requesting that information on registration of cotton export contracts be placed in the public domain as is being done in the case of cotton yarn.
He said if the decision to ban cotton export had not been taken at this stage, the export of cotton would have reduced the stocks to a dangerous level.