Expressing concern over volatility in yarn prices, the Apparel Export Promotion Council (AEPC) has sought early Government intervention to overcome the situation.
In a letter to Commerce and Industry, Textile Minister Anand Sharma, the AEPC said cotton yarn prices should be carefully monitored, as small manufacturers and handloom weavers were considerably impacted due to the steep price hike.
AEPC Chairman A. Sakthivel said, “Unfortunately in the last few months, we have experienced volatility in the price of cotton yarn. While cotton has gone up by about 3-5 per cent in the last two months, yarn prices have increased over 15 per cent in the same period. Also, Indian cotton yarn prices are higher than in other countries such as Pakistan”.
He said at the recently concluded Cotton Yarn Advisory Board meet on August 23, a rather grim scenario had emerged as the total production estimate of cotton yarn stood at 3.5 billion kg. While exports of cotton yarn were projected at 920 million kg, based on current estimates it may exceed one billion kg.
AEPC said that to tide over the situation, the Government needed to put a cap on exports of cotton yarn or free imports of cotton yarn.
“At this stage, we are not advocating any cap on exports, but at the same time, we request that the custom duty of 10 per cent on cotton yarn be completely removed and yarn imports made duty-free. Also, drawback may be allowed on export of garments manufactured from such imported cotton yarn,” he added