Govt to set cotton export volume.

New Delhi: India will fix the quantum of cotton to be exported every year to end uncertainty on its availability for shipment abroad, the commerce secretary said.

Before the next season starts October 1, the government will announce the volume that could be exported, Rahul Khullar said on Friday. “Once 2010-11 cotton year starts (on October 1), I will make sure that cotton export is unrestricted, there is no tax on cotton exports, and in advance of the season, it would (be) made known how much quantity would be exported and how much is available for domestic consumption,” he said.

“The quantity available for exports and domestic consumption will be fixed by collegian of secretaries of agriculture, textiles and commerce,” he said.

Each of these officials will provide data to help the secretaries make informed decisions.

The agriculture secretary will give inputs on cotton production, the textiles secretary will detail the industry’s cotton demand, and “I, as a regulator of exports, will ensure cotton shipment is not impaired as long as there is domestic availability,” he said.

In April, government banned raw cotton exports but protest from farm lobbies led to revoke of the ban.

However, duty was imposed on cotton exports and they were regulated. The government will cancel export duty on cotton from the 2010-11 season. The current cotton season (2009-10) is an “unusual year” because India “had surplus cotton when there was worldwide shortage of cotton”, Khullar said.

This prompted hoarding of the commodity causing a big surge in prices. “India was lucky we had it (cotton) and we managed to export large quantity also,” Khullar said. “But there was 15-20% shortage in global production resulting in unusual increase in prices,” he said.

In 2009-10, India produced 29.2 million bales cotton, 200,000 bales more than the previous year. “This was a one-off event,” he noted, adding “Extreme circumstances need special measures and hence, we had to restrict cotton exports to ensure domestic availability.”

The restrictions will continue up to the end of this season that until September 30, he said.

“We will revert to status quo ante on exports of cotton on October 1 with the arrival of new crops,” he said, adding “that means there will be unrestricted exports of cotton from October 1.”

India is the world’s second largest supplier of cotton. It is also a major consumer with a large domestic textile industry.

In India, cotton price rose over 30% since the beginning of...


Source : Financial Express