The Textiles Ministry today said it would be in favour of cotton exports beyond the present cap of 55 lakh bales this year if production exceeds the estimate of 325 lakh bales.
"The Textiles Ministry would be the first to support the movement (of cotton) out of the country in the form of exports (if production exceeds 325 lakh bales)...," Secretary in the Textiles Ministry Rita Menon said when asked if the government would allow cotton exports beyond the current ceiling of 55 lakh bales in the cotton season.
Cotton season starts in October.
She was talking to reporters after the inauguration of a handloom and handicrafts fair at Dilli Haat.
Menon, however said, requirement of the domestic textiles industry should be kept in mind before permitting exports beyond 55 lakh bales.
The domestic textiles industry is likely to consume 220 lakh bales this year.
Earlier, the government had announced that duty free exports of 55 lakh bales (of 170 kg) would be allowed in the current cotton marketing season.
The Commerce Ministry had said that exports beyond 55 lakh bales would attract duty. To curb exports in wake of rising domestic prices of cotton, a duty of Rs 2,500 per tonne was imposed.
When asked if the government would impose any curbs on exports beyond 55 lakh bales, Menon said "the instruments that we will use after 55 lakh bales (of exports) will be considered by the government after a review meeting later this month."
The Textiles Commissioner has started registration of cotton export contracts from October 1 and the actual shipments would start from November 1.
The registration of contracts would stop automatically the moment the ceiling of 55 lakh bales is reached.
Currently, the cotton prices in the domestic market are ruling over 65 per cent higher than Rs 22,400 (per candy) in the same period last year.
Further Menon said that a Yarn Advisory Board has been recently set up by the Textiles Ministry to take a stock of the yarn availability in the domestic market.
"The board has seen that there is a gap between the production and requirement by the mills. I feel when it (board) will be strengthened, the gap between the yarn required and exported will be reduced," she said.
Asked if the cotton prices would crash in the coming days, the Secretary said, "I believe that there will never be a situation where the cotton prices will crash, as there is enhanced capacity creation which is taking place in the industry."
