Increased Export Allowance Shocks the Indian Spinning Sector

The Indian government’s decision to allow a one million-bale increase to the cotton export limit has shocked the country’s cotton spinning sector.

On June 9, the Coimbatore-based The Southern India Mills’ Association (SIMA)  expressed dissatisfaction with the government’s decision to cap this season’s cotton exports at 6.5 million bales (170 kg each) rather than the previously announced limit of 5.5 million bales.Mr. J. Thulasidharan, Chairman of SIMA, has stated that the government previously made assurances that exports would be capped at 5 million bales. With the enhanced export limit, the country’s closing stock this year will drop to 1.75 million bales.

Thulasidharan says that India’s Agriculture Ministry has overestimated this year’s crop, which the government expectes to reach 33.9 million bales. SIMA, on the other hand, has chosen to believe a different estimate of 31 million bales and is pleading with government officials to reconsider their decision.