Apparel Export Promotion Council (AEPC) Chairman Narendra Goenka warned that rising cotton, yarn prices may affect the country's apparel exports target of USD 19-20 billion during the current fiscal. He suggested the government to impose a temporary ban on exports of cotton and cotton yarn like Indonesia has done for its palm oil.
The unabated surge in prices of cotton and cotton yarn may affect the country's apparel exports target of USD 19-20 billion during the current fiscal, AEPC Chairman Narendra Goenka said on Thursday. He said that the prices have jumped by about 125-130 percent during the last 18 months and one of the reasons for that would be "unchecked" exports of cotton and cotton yarn.
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He suggested the government to impose a temporary ban on exports of cotton and cotton yarn like Indonesia has done for its palm oil. "In 2021-22, the exports were USD 16 billion and we are targeting USD 19-20 billion this fiscal. But because of the price rise, it looks to be a concern on achieving the target. The industry is facing a big challenge at the raw material front," Goenka said.
He added that if the price rise does not stop, global customers would start looking at sourcing options other than India. "About 60-70 percent of cotton and cotton yarn are going to our competitor countries like Bangladesh and Vietnam. This is a worrisome situation," he said.
On the export front, he said that the Apparel Export Promotion Council (AEPC) is taking several steps like organising buyer-seller meetings in different parts of the world to promote exports. "The free trade agreement with UAE and Australia would give a significant jump in our exports. Resolving the raw material issue will help in availing the full benefit of these agreements," he said.
Union commerce minister Piyush Goyal held a meeting recently with stakeholders of the cotton value chain to discuss the surging cotton and yarn prices in the current season. Goyal has asked the stakeholders to resolve the issue with collaboration without pushing the government to intervene which, the minister warned, would have a long-term impact on the cotton value chain.
Goenka said that the price rise is happening at a time when the apparel industry is in expansion mode by availing benefits of production linked incentives and other schemes. The council is exploring new markets in South America and Africa to further boost the exports.
Ready-made garment exports rose by 21.4 percent to USD 1.57 billion in April this year as against the corresponding month of last year.
First Published: May 19, 2022 5:21 PM IST
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