High Prices of Cotton, Textiles and India

In times of low cotton production, the Latin American textile industry protests against restrictions imposed on exports from India.

Wednesday, November 24, 2010

The price of cotton has risen more than 70% so far this year, as a result of lower production, a situation that profoundly affects the textile industry.

India, a major producer of cotton and textile products, imposed in April restrictions on cotton exports, which contributed to increase the price for textile producers from other countries.

Textile business associations in Nicaragua, Honduras, El Salvador, Costa Rica, Guatemala, Colombia, Dominican Republic, Brazil and Peru came together to demand that their governments take action against the restrictions imposed by India, characterizing them as illegal.

In a letter dated November 18th, this group reported that since India put in place these measures, the price of cotton increased 126% and that "differential is clearly designed to allow India to grab market share in textiles and apparel during a time of reduced worldwide supply of cotton ... India is withholding between 1.5 [million] and 3.5 million bales of cotton from the export market in order to benefit its domestic industry".



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Between January and May sales grew by 25% compared to the same period in 2010.

The rise in sales to the U.S. was higher than to countries like El Salvador, Honduras and Guatemala, which increased by 19%, 17% and 13% respectively in the same period.

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