Business Standard

Govt eases cotton export cap

Related News

Allows export of another 1 million bales in this crop year.

After months of differences between the and textiles ministry over lifting the cap on export of cotton, the government on Wednesday finally allowed export of another 1 million bales of cotton in 2010-2011 crop marketing season that started in October (1 bale=170 kg).

With this, almost 6.5 million bales of cotton will be allowed to be exported this year.

Earlier, it had capped export at 5.5 million bales. However, the agriculture ministry had opposed the cap on the grounds that production this year was more than the consumption.

“We have allowed additional export of 1 million bales of cotton this year,” Commerce minister told reporters after a group of ministers’ meeting. All other details about the method of exports and the timeframe in which the cotton needs to be shipped will be determined by the commerce ministry.

Sources said in Wednesday’s meeting, the textiles ministry had opposed easing of the export cap on the ground that production of cotton in 2010-2011 is estimated to be 31.2 million bales, down from the earlier estimate of 32.5 million bales.

In such a situation if more exports are allowed then the surplus left at the end of the season will be even less than the country’s monthly consumption. However, its objection did not find much support.

According to the agriculture ministry’s third advanced estimate, production of cotton in 2010-2011 is estimated to be around 33.92 million bales, almost 40 per cent more than last year.

Agriculture minister had twice written letters to the Prime Minister requesting him to lift the cap on exports in the interest of farmers. Cotton prices have softened from Rs 62,000 a candy to Rs 45,000 a candy (1 candy =376 kg) in the last few months.

Meawnhile, the Confederation of Indian Textile Industry (), the apex body of textilies industry in the country, termed the government's decison to allow more exports as 'disturbing'.

“We have met the minister on Wednesday and urged him not to allow more exports or else the country will be left with very little cotton by the end of this season,” , chairman of Citi told Business Standard.

He said as per their assessment after on Wednesday decision, the country's closing stock of cotton will come down to just 1.75 million bales, which is not even sufficient to meet one month's consumption.

"We consume around 2.3 million to 2.5 million bales of cotton every month and after on Wednesday decision, the surplus with come down to just 1.75 million bales," Jaipuria said. He said the closing stock of cotton would have been around 2.75 million bales if the government struck to its earlier decision to cap exports at 5.5 million bales.

Read more on:   
|
|
|
|
|

Read More

Odisha eases sales restriction on ore from lease-expired mines

Traders say supply to get a boost of 10 million tonnes

Quick Links

 

Market News

Cotton exports hit as China shifts policy

Raw cotton export may fall 20% in the next crop year as against 6% this year; rise in finished yarn exports adds to woes

Sugar exports: Industry restive over delays in subsidy revision

For February-March, the rate decided was Rs 3,300 a tonne; that for April-May was to be announced in the last week of March

Sugar output down 4%, says Isma

Indian mills had produced 1.54 mt raw sugar by the end of March and of that 850,000 tonnes was exported

Analysts' corner

India Cements' stand-alone return ratios have remained subdued over the years due to weak profitability

Jaimini Bhagwati: Are stock prices inflated?

Despite what partisan fund managers are projecting, the rise in the Indian equity market has to be evaluated carefully

Back to Top