Decision on raising cotton exports cap on Dec 13: Khullar

The government will decide whether to hike the cap on cotton exports in the current season beyond the existing ceiling of 55 lakh bales on December 13, Commerce Secretary Rahul Khullar said today.

A meeting of the secretaries of the ministries of commerce, agriculture and textiles, which was scheduled to be held tomorrow, has been postponed till Monday, as Khullar leaves for Brussels tonight for the India-EU Summit on December 10.

"Cotton meeting has been postponed till Monday... Then we will take a decision," he told reporters here.

Current trends, as well as the price situation of the natural fibre, will also be looked into at the review meeting.

The government had earlier accorded permission for the export of 55 lakh bales (170 kg each) of the natural fibre in the current cotton season, which runs from October to September.

Cotton production is expected to total 335 lakh bales in 2010-11, whereas domestic demand is pegged at 266 lakh bales.

Prices of the natural fibre have increased sharply over the past few months. According to industry experts, prices of the natural fibre are ruling at about Rs 43,000 at present, compared to around Rs 26,000 in the same period last year.

The government has also imposed a cap of 72 crore kg on cotton yarn exports this fiscal to help the domestic textiles industry in view of rising prices in the global market.

According to industry sources, prices of cotton yarn have increased by about 85 per cent in the last nine months.

Total cotton yarn production is estimated at 346 crore kg in 2010-11, while domestic demand is pegged at 265 crore kg.

The textiles industry has been clamouring for restrictions on the export of cotton and cotton yarn, arguing that high prices are making their operations unviable.

India's cotton exports increased to 83 lakh bales during October-September, 2009-10, cotton season, compared to 35 lakh bales in the same period of 2008-09, as per official estimates.