MUMBAI, May 16: The Indian Cotton Mills' Federation (ICMF) has expressed deep concern over the continuing hike in cotton prices during the last two and half months. According to ICMF, the problem has worsened this year due to the additional release of raw cotton for exports.

In a release, ICMF chairman D Lakshminarayanaswamy said that the steep rise in cotton prices, ranging between Rs 1,100 and Rs 2,400 per candy, would have a "deleterious" impact on the financial status of textile mills.

Apart from the prices, the mills have also been hit hard by the non-availability of quality cotton. He said the centre had aggravated the problem by releasing 12.30 lakh bales of raw cotton for export during the current crop year. The government has also allowed 4.30 lakh bales of cotton for exports during the crop year in order to make up last year's unused quota. Exports of raw cotton would undermine India's competitive strength in encouraging export of value-added textile products and any further export of raw cotton would fuel prices, Lakshminarayanaswamy said.

Stating that the estimated carry-over stock of 20 lakh bales would hardly meet one-and-a-half months' requirement of textile mills, he urged the government not to permit further exports of cotton.

He said the textile ministry should consider ICMF's plea on exports as the industry has been going through a severe liquidity crunch. The number of closed textile mills has increased from 173 in April 1996 to 209 in March 1997.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.