Bangladesh's apparel manufacturers have expressed concerns over India's export ban on cotton, saying that it would cause an adverse impact on both production and export of local textiles and readymade garments.
They expressed the fear that as a result, the prices of imported cotton and yarn will increase significantly, thus affecting the competitiveness of locally made apparel items.
The Indian Directorate General of Foreign Trade (DGFT) imposed ban on cotton exports with immediate effect to conserve supplies for local mills.
Last time India imposed similar ban on cotton export in April 2010 but withdrew it before the year end.
"It is very shocking news for us. The ban will put very negative impact on our industry," President of Bangladesh Textile Mills Association (BTMA), Jahangir Alamin told media.
Bangladesh meets nearly 45% of its cotton needs through importing from India, the second-largest cotton exporter in the world.
"A similar ban by India in April 2010 raised global cotton price to US$2.40 per pound from US$0.6 causing sufferings to our mills," said Mr Alamin.
He said as the news of Indian cotton export ban spreads, demand in the other sources will go up significantly raising its price. "Even if we go for other sources like Uzbekistan, the US or Burkina Faso, lead time will be a factor. Thus, many spinning mills will go out of stock," he said.
Mr Alamin said the Indian government should allow export of cotton in cases where contracts were signed and letters of credit (LCs) were opened before the announcement.
India's textile companies have been complaining that they are losing competitiveness versus their rivals in Bangladesh and Pakistan because of rising cotton prices in India. The Indian trade regulator's move is expected to push down cotton prices in the country. |
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