Cotton, yarn overtaking textile product exports

Cotton export has grown phenomenally in October along with increase in yarn export. A declining trend has now set in for export of value-added textile products during October virtually across-the-board, signalling a reversal in export trend of textiles. During the last two years - 2001-02 and 2002-03 - the export of value-added textile products had overtaken export of cotton and yarn. By and large the export structure growth of textiles was set on the path as visualized by the policymakers who designed ''Textile Vision 2005''. Textile exporters blame big textile groups and powerful feudals for exporting cotton and yarn and keeping the local industry starved of these basic inputs. Banks have been more than generous in offering finances to the feudals and big textile groups at a much lower rate. Easy bank loan on low rate of return has enabled the big feudals to hold on cotton for a longer period and facilitated big textile groups to buy it and hoard it. "Mind it many leading textile companies earn handsome profits from cotton trade," a textile exporter said. Not only that small textile groups are being squeezed out of the business, the whole range of textile product exporters now find themselves hard pressed under the burden of spiralling yarn prices. This reversal in textile export structure has set in during October when cotton prices rose to Rs3,500 a maund in the local market and more than 80 cents in the international market. Similarly, prices of yarn in the domestic market increased considerably and spinners report yarn export is showing rising trend.