More groups urge action against India cotton curb

WORLD: More groups urge action against India cotton curb

By just-style.com | 23 November 2010

Textile groups from ten developing countries have added to calls from the US, EU, Turkey and Mexico for action against the Indian government for restricting cotton exports and contributing to global shortages and rocketing prices of the fibre.

Brazil, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua and Peru are the latest to join a worldwide coalition that claims India has broken WTO rules and say it must be held to account after its "anti-trade actions on cotton have caused turmoil in world markets."

In a joint letter last week, the groups, who between them represent 2.5m textile and apparel workers in the western hemisphere, urged their governments to take action.

The letter cites what it says are new statistics claiming the Indian government is subsidising its textile and apparel export sector by restricting exports of cotton.

The groups say there is a16 cents per lb price difference between the price that Indian textile and apparel mills pay for their cotton and the world price of cotton. They also note that the price differential has increased each time the Indian government has announced new restrictions on the export of cotton.

The groups believe Indian cotton restraints have contributed to an enormous increase in the price of cotton for non-Indian textile producers around the globe. Since India began restricting exports of raw cotton in April, the price of cotton has increased by 126%, from 62 cents per lb to $1.40 per lb.

In their letter, the groups point out that India's actions have come as world supply of cotton has tightened amid increasing demand and disappointing cotton crops in several large producing countries.

As the second largest exporter of cotton, India is enjoying one of its largest cotton crops in history but has dramatically restricted its exports over the last six months.

The groups also claim analysis of India cotton production and consumption figures demonstrate that India is withholding between 1.5m and 3.5m bales of cotton from its export market in order to give its textile and apparel export sector an advantage over other world producers.