India to export 55 lakh bales of cotton in 2010-11.

Central government has allowed export of 55-lakh bales cotton during cultivation year, October 2010 – September 2011. The exports can be done beginning October 1, 2010.

However, ceiling on exportable surplus would be reviewed and revised on November 15 depending on demand-supply position in the domestic market and international prices of cotton.

The government has arrived at exportable surplus quantity following a detailed discussion with officials from textiles, agriculture ministries and DGFT on Friday. Prior to this, commerce, agriculture and textile secretaries had met on September 1 wherein a decision was taken to allow unrestricted export of surplus cotton from India with a prohibitive tax on exports over the permissible limit.

This means that there would be no ban or licences required for export of 55 lakh bales. However, the subsequent shipments would attract duty. “The moment exporters hit the ceiling (fixed at 55 lakh bales from October 1) a prohibitive export duty will be imposed. Centre will also review the exportable surplus on November 15 depending on exports between October and November, domestic industry demand and the international prices of cotton and cotton yarn at that time,” commerce secretary Rahul Khullar said. At present, cotton exports attract Rs 2,500 per tonne as duty.

Initial estimates suggest that cotton production in the country would be approximately 325 lakh bales while the domestic consumption would be 266 lakh bales. The industry is also likely to import about seven lakh bales.

Last year 83 lakh bales of cotton were exported out of India against the total production of 295 lakh bales. However, in the wake of increased exports and rising prices, the Centre during April-May this year suspended the registration of new export contracts besides restricting shipments under the licence regime.

“Once the procedure for cotton export contracts is made clear, it will help to regulate export and domestic prices will be moderated,” Siddharth Rajgopal, executive director, Cotton Export Promotion Council added.

Source : mydigitalfc.com