India’s recent decision to stop cotton exports to meet domestic demand has put a smile on the faces of Turkey’s cotton producers who believe that India’s move will lead to a rise in cotton prices, which have lately been low.
However, the Indian move is still not clear as the country’s agriculture minister says he is not aware of such a decision.
India announced yesterday a review of its recent ban on cotton exports after outrage among farmers, Agence France-Presse reported.
A panel of ministers will meet tomorrow “to urgently review”
the ban, Prime Minister Manmohan Singh’s office said following a meeting in New Delhi with regional leaders.
Agriculture Minister Sharad Pawar lobbied the prime minister for the ban to be overturned after saying he was not consulted about the move, which was announced by the Directorate General of Foreign Trade (DGFT).
Turkish cotton sector representatives who spoke with Anatolia news agency said cotton prices could rise to 5 Turkish Liras per kilogram, thereby triggering an increase in cotton prices.
“With India’s decision, Turkish cotton prices can now be at par with world prices, but for this to trigger more cotton production, cotton prices would have to reach 5 liras a kilo,” said Barış Kocagöz from the National Cotton Council.
Kocagöz added that he did not believe India’s move to halt cotton exports would really be the trigger to spur local cotton production given that last year Turkish cotton production was up 45 percent from 500,000 tons to 750,000 tons, but producers could barely cover their costs.
“India’s decision will give producers a little hope, but we don’t believe it will be enough to spur production,” added Kocagöz.
Söke producers hopeful
Meanwhile, however, cotton producers in the Aegean province of Söke are hopeful they will be able to break even and cover their costs. Kemal Kocabaş, president of the Söke Chamber of Agriculture, said the cost of production for one kilo of cotton was 1.67 liras and the sale price was 1.35 to 1.40 liras per kilo and that Söke’s cotton producers were tying their hopes to India’s decision.
Sabri Ünlütürk, president of the Aegean Textile and Raw Material Exporters Union, told the Anatolia news agency the global economic crisis has led to a 4 to 5 percent lull in cotton demand and India’s decision could only have a marginal impact on the rise in cotton prices.
“There could be a short-term price movement due to India’s decision to stop exports. However, there isn’t sufficient market demand to support a price increase and low demand levels will put the brakes on any price increases,” explained Ünlütürk.
Mender Textile Executive Board Vice President Ahmet Göksan believes Turkish cotton should be labeled as a “strategic product.” He also believes that India’s decision will have little effect on cotton prices. China, who is India’s largest importer of cotton, has not been affected at all by India’s decision, said Göksan.
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Source : hurriyetdailynews.com
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