Federation of Indian Export Organisations (FIEO) has appealed to the Prime Minister, Manmohan Singh, to suspend export of raw cotton stating rising prices of the commodity has become a double whammy for the textiles industry, hit by the global demand slump.

“The cotton textile industry was saddled with high cost of cotton, failure to compete with the multinational cotton traders and ultimately end up paying high prices to the same traders even for the domestic requirement,” FIEO said in a statement here.

It said cotton prices had increased due to booking of the commodity for imports by international traders. They expect that cotton supply in the global market would fall short by 15 lakh bales (170 kg). Shankar-6 variety of cotton was selling at Rs. 25,000 (356 kg) against Rs. 23,000 a candy last year. Apparel, made-ups and fabric exporters require cotton yarn at competitive rates to compete with China, Bangladesh, Sri Lanka and Vietnam, it said.

“Suspending cotton exports temporarily will help textile sector sustain in the global export market,” it said. Over 10 lakh bales from the current year’s crop have been registered with the Textile Commissioner for exports, while another 10 lakh bales are with traders for registration. The federation said readymade garments exports in October dipped by 30 per cent over the same period last year. “Decline in exports may have serious ramification for the economy particularly when monsoon was also below average in few meteorological zones of the country,” it said.

According to the FIEO, cotton accounts for more than 60 per cent of the raw material for the $60-billion textile industry, which is the second largest employer after agriculture.

This will help textile sector sustain in the global export market