India - Govt May Increase Cotton Exports Quota.

The government is likely to consider increasing cotton exports beyond the ceiling of 65 lakh bales for the current cotton season soon, hinted Textile Secretay Rita Menon in New Delhi on Tuesday.

"We could consider to increase the quota of cotton...There can be certainly an increase but I cannot give the amount," Menon added.

Last year the government had put a cap of 55 lakh bales (170 kg each) on natural fibre exports for the current season to protect domestic textiles industry in the wake of rising raw material prices. Later on in June 2011, the ceiling was again increased by another 10 lakh bales.

The Textile Ministry is likely to take a final call on this issue after the inter-ministerial panel consultations in August. The panel which is chaired by Finance Minister Pranab Mukherjee, would review crop arrivals in the mandis, availability and exportable surplus of the fibre.

After peaking at Rs 62,500 per candy (356 kg) in March-end in the domestic market, cotton prices have crashed to Rs 34,500 per candy now. At present, the cotton production is estimated at 307 lakh bales.

According to CAB figures, the crop forecast for the current season has been lowered at 312 lakh bales in April from 329 lakh bales due to unseasonal rains in states like Andhra Pradesh and Maharashtra in last December.

Also, the Cotton Advisory Board (CAB) is watching closely the cotton arrival data, which is scheduled to meet in August.

Source : yarnsandfibers.com