Cotton export contracts registration postponed to Oct 1 .

New Delhi, Sept. 15 The Government has postponed registration of cotton export contracts by a fortnight to October 1. This is being done to prevent surge in prices of the item due to speculation, official sources said. This follows hectic lobbying by the textile industry, which raised concerns over rising cotton prices in the country.

“Registration of cotton exports was to begin today. That has been postponed to October 1,” the Commerce Secretary, Dr Rahul Khullar, told presspersons here.

Sources said there has been an increase in cotton prices due to speculation and that it was causing problems. However, they emphasised that there will be no change in what the Government announced recently as a policy on cotton exports.

Cap on exports

Dr Khullar had said earlier this month that the Government will cap cotton exports for the season starting October 1 at 55 lakh bales. A prohibitive duty will be imposed on shipments above this ceiling, he had said.

India's textile and clothing industry bodies, including the Confederation of Indian Textile Industry (CITI), had demanded that the Government should stop registration of cotton export contracts in the October-December period to facilitate an increase in the availability of the item to the domestic textile industry.

They also called for imposition of an export duty of Rs 10,000/tonne to discourage shipments, and restricting the registration of contracts for export of cotton for the January-September 2011 period to the exportable surplus assessed by the Cotton Advisory Board of 49.5 lakh bales. China is the world's largest cotton grower, and India comes second.

Delayed harvest

The ongoing heavy rains in cotton-producing states in the country is expected to delay cotton harvest by around two to three weeks. This is expected to result in an increase of prices of the item and postponement of its exports to countries such as Pakistan and China.

India's cotton production for 2010-11 is estimated to be around 325 lakh bales, up from 295 lakh bales during the year-ago period.

The industry bodies, in a joint letter addressed to the Prime Minister, the Finance Minister, the Commerce Minister and the Textile Minister, had sought that contracts should be registered only for exports to actual users, in order to avoid stock transfer among traders and hoarding. The withdrawal of the export incentive of 1.5 per cent being given on exports of raw cotton was also sought.

CITI said that despite bumper crop of 295 lakh bales during cotton year 2009-10 (October-December), Shanker-6, which is the standard cotton, is being sold at Rs 38,000/candy (355 kg) as against Rs 23,000/candy in the beginning of the year.

Source : blonnet.com