Cotton exports to be allowed till quota ends

Firm on stand

No change in decision to export 55 lakh bales

Prices gain after move to continue shipments

Our Bureau

Chennai, Dec. 17

The Government has decided to allow exports of cotton until the allocated quota of 55 lakh bales (of 170 kg) for shipments gets exhausted.

In a notification issued late on Thursday night, supported by a circular, on giving the Directorate General of Foreign Trade (DGFT) the mandate to issue export authorisation registration certificate for cotton, it said the decision to allow export of 55 lakh bales stands.

While allowing exports from November 1, the Centre had given a 45-day deadline for the shipments to be completed. However, hardly 30 lakh bales were exported till the deadline expired.

Details on the exact quantity that has been exported are awaited.

With the notification, exporters will now register with the DGFT for shipping cotton. “Exact modalities of such registration and conditions that need to be fulfilled or observed will be notified separately, once the balance quantity that remains to be exported is ascertained,” the circular said.

The notification had an immediate effect on the market as price in Gujarat markets increased Rs 1,500 for a candy of 356 kg on Friday, our correspondent reports from Rajkot. Prices for Shankar-6 variety increased to Rs 41,000-41,200 a candy, while raw cotton or kapas was traded at Rs 890-910 a kg. Earlier this week, raw cotton prices had dropped to Rs 870 on uncertainty over exports.

The registration authority has been changed as a hue and cry was raised in October when the process began over the way the issue was handled.

The Government has estimated cotton production this season to September at 325 lakh bales. Despite reports of damage to crop due to rain in November, the Government has said that there are no changes in the estimates.

Rain in early part of November and Diwali holidays affected exporters from buying cotton from farmers. “At least, 12-15 days were lost due to rain and holidays and we could not procure anything then,” said Mr M.P. Patel, Managing Director of Jaideep Cotton Fibres in Rajkot.

A global trade source said at least 75 lakh bales could be exported from the country.

Source: http://www.thehindubusinessline.com/2010/12/18/stories/2010121853080100.htm