CHANDIGARH: The government's decision to allow further exports of cotton likely to lead to increase in its prices and a drop in domestic availability, as per the concerns of the textile industry in Punjab.
The Punjab industry also fears that the increase in cotton prices would put further pressure on margins of companies, which are already facing challenging phase.
SP Oswal, Vardhman Textiles Chairman, said, “Because cotton export has been allowed, the prices of raw cotton will certainly go up and the stock availability of crop in the country will also be affected.”
On April 30, the government had decided to allow further exports of the natural fibre in 2011-12 marketing year ending September as production estimates have been revised upwards by the Cotton Advisory Board (CAB) and the Agriculture Ministry.
With the Centre's nod for cotton exports, the prices would soon inch up to the level of global cotton rates.
Presently, global cotton price rules at 99.85 cents per pound (453.59 gm), while cotton rates in domestic market stand at 87 cents per pound.