Indian Textile Firms Seek Security of Cotton Supply

The saga continues on cotton export restrictions in India. With stock-to-use ratios at unusually low levels, the Indian textile industry is urging the government to monitor existing cotton stocks to ensure that there is enough material for domestic use. More than a dozen spinning, weaving and apparel associations, headed by the Confederation of Indian Textile Industry (CITI), issued a joint statement asking the government to create a raw materials security system.

Although cotton production currently exceeds domestic demand, textile companies say the nation’s stock-to-use ratio sits at about 15 percent, while the rest of the world averages more than double that amount (33 percent). According to the statement from CITI, “In the past, whenever the stock-to-use ratio dipped below 20 percent, cotton prices increased abnormally, and it is very essential to maintain at least 25 percent stock-to-use ratio to have stability in raw material prices and sustain the competitiveness of the textile industry.”

The associations gathered to issue their statement after the Indian government announced it would repeal export taxes and allow cotton export under Open General License beginning on October 1. The textile industry wants surplus cotton to be monitored and exports permitted only in equal, monthly installments.