Textile sector faces blow as India bans cotton exportStaff Correspondent
The Indian government’s decision on Monday to ban cotton export will hit the Bangladesh textile sector hard, said local textile millers.
The Directorate General of Foreign Trade of India on Monday said that export of cotton has been prohibited with immediate effect till further orders as the world’s second-largest exporter of the fibre moved to conserve supplies for local mills, reports Reuters.
‘Export against registration certificates already issued will also not be allowed,’ the Indian DGFT notification said.
Bangladesh Textiles Association president Jahangir Alamin told New Age on Monday that the Indian ban on cotton export would have severe negative impact on Bangladesh textile sector, severely affecting the country’s apparel exports.
He said out of the total demand of around four million bales of cotton for Bangladesh, around 30-40 per cent of the demand used to be met by importing cotton from India by land.
‘We will have to increase import of cotton from central Asian countries like Uzbekistan and United States because of Indian ban. As a result, the cost of import including cotton price, transportation cost and time for import, would be higher resulting in increase in cost of production of yarn and fabrics,’ he said.
Bangladesh meets 60 per cent of its annual demand from Uzbekistan, the world’s third-largest cotton exporter. It also buys cotton from Russia and USA worth more than $1.5 billion.
Jahangir said that it took around 15 days to import cotton from India and around 1-2 months from Uzbekistan by completing all procedures.
Besides, cotton price in India is around $1 per pound whereas the price of Uzbek cotton is around $1.10 per pound.
Another exporter of textile products said the Indian cotton export ban would hurt Bangladesh’s spinning mills and export-oriented knitting manufacturing firms.
‘The decision will not only hike yarn prices but also hit export performances,’ he feared.
Jahangir said that they would request the government to take up the issue with India.
India’s cotton association also criticised the
government for slapping the ban.
‘[It’s a] very regretful decision and this will permanently damage the reputation of the country in the international market,’ said Dhiren N Sheth, president of Cotton Association of India. ‘Prices are likely to touch support price levels very soon.’
India had already exported 8.5 million bales, higher than the government estimates made in January of 8.4 million bales of 170 kilograms each for the year, on strong demand from China. Over 80 per cent of exports so far have headed to the Asian giant, said the Reuters report.
Traders in India had signed contracts for nearly 10 million bales in total for export at $1.01-$1.03 per pound, including those already shipped.
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