Ministers likely to decide on cotton exports tomorrow
Senior ministers are likely to take a decision on the contentious issue of cotton exports tommorrow, in the backdrop of demand from the textiles industry to curb global shipments of the natural fibre.
The ministers including Pranab Mukherjee, Sharad Pawar, Anand Sharma and Dayanidhi Maran will also consider the Textiles Ministry's proposal to impose a duty of Rs 2,500 per tonne on cotton exports.
The Textiles Ministry wants imposition of export duty as soon as the cotton arrivals begin next month.
The Commerce Ministry, however, has already announced a duty free quota of 55 lakh bales and that the duty, if imposed, should be on the quantity over and above this threshold.
The textile industry has been demanding a minimum prohibitive duty of Rs 10,000 per tonne on exports, to ensure adequate amount of cotton is available to meet the domestic demand.
The registration for export contracts, which was scheduled from September 15 has been postponed till October 1.
As per the government projections, the cotton production in 2010-11 would be a record 330 lakh bales. This is in contrast to the last season production of 295 lakh bales (1 bale is equal to 170 kg).
Despite the higher projection figures for this year, the industry fears the estimated cotton production could be impacted due to floods, which could also lead to late crop arrivals.
The government has announced export restrictions, including export duty of Rs 2,500 per tonne and suspension of registration of new export contracts.
India's cotton exports during 2009-10 were estimated to be 83 lakh bales, triggering price rise in the domestic market and demand for restrictions on selling the natural fibre to overseas markets.
Industry source say clear pricing trend would emerge from the first week of October when there are fresh arrivals of the natural fibre.