Govt gives more time to cotton exporters to exhaust the limit

In a bid to calm the flared up cotton market, the government today gave exporters more time to exhaust the permissible shipment limit of 55 lakh bales, saying that there has been no change in the ceiling for the current year.

The entire shipment quota was to be completed by December 15. However, so far cotton exports have reached less than half the permissible limit on supply constraints.

"The decision to permit export of 55 lakh bales only in the current cotton season stands," Directorate General of Foreign Trade (DGFT) said.

A Group of Ministers (GoM) had allowed 55 lakh bales for exports during the cotton season 2010-11 (October-September), but exporters failed to ship the entire quantity after unseasonal rains delayed arrivals in the spot market. 

"It has been brought to the notice of government that actual exports... are much less than the quantity approved by GoM," DGFT said. 

Last week, the commerce ministry shifted the registration of export contracts to DGFT from the Textile Commissioner. 

Following the administrative decision to shift registration process, prices in the cotton market flared up by as much as 12 per cent to about Rs 42,000 per candy (of 355 kg each).  

India is likely to produce more than 325 lakh bales (170 Kg each) of cotton in 2010-11, higher than last year's 295 lakh bales.